The Jt. DIT ( Exemption),, Ahmedabad v. Nirma University,, Ahmedabad

ITA 1627/AHD/2015 | 2011-2012
Pronouncement Date: 29-11-2017 | Result: Dismissed

Appeal Details

RSA Number 162720514 RSA 2015
Assessee PAN AAATT6829N
Bench Ahmedabad
Appeal Number ITA 1627/AHD/2015
Duration Of Justice 2 year(s) 5 month(s) 20 day(s)
Appellant The Jt. DIT ( Exemption),, Ahmedabad
Respondent Nirma University,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 29-11-2017
Assessment Year 2011-2012
Appeal Filed On 08-06-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI S. S. GODARA JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER ITA NO. 1627/AHD/2015 (ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER (EXEMPTIONS) WARD 1 AHMEDABAD APPELLAN T VS. NIRMA UNIVERSITY SARKHEJ GANDHINAGAR HIGHWAY P.O. CHANDLODIA AHMEDABAD RESPONDENT PAN: AAATT6829N /BY REVENUE : ADITYA SHUKLA D.R. /BY ASSESSEE : H. C. SHAH A.R. /DATE OF HEARING : 10.11.2017 /DATE OF PRONOUNCEMENT : 29.11.2017 ORDER PER S. S. GODARA JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2011-12 E MANATES FROM THE CIT(A)-9 AHMEDABADS ORDER DATED 13.03.2015 IN CAS E NO. CIT(A)-9/267/JDITO EXEM/2014-15 REVERSING ASSESSING OFFICERS ACTION DISALLOWING DEPRECIATION CLAIM OF RS.5 77 27 323/- IN ASSESSMENT ORDER DATED 18.03 .2014 BY TERMING THE SAME TO BE A CASE OF DOUBLE DEDUCTION IN VIEW OF HONBLE AP EX COURTS JUDGMENT IN ESCORTS ITA NO. 1627/AHD/15 [ ITO VS. NIRMA UNIVERSITY] A.Y. 2011-12 - 2 - LTD. CASE 199 ITR 43 (SC) IN PROCEEDINGS U/S. 143( 3) OF THE INCOME TAX ACT 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. A PERUSAL OF REVENUES PLEADINGS RAISING THE ABO VE SOLE ISSUE OF DEPRECIATION DISALLOWANCE INVOLVES A VERY NARROW CO NSPECTUS OF FACTS. THIS ASSESSEE IS ADMITTEDLY ASSESSED AS A CHARITABLE TRU ST. IT RUNS EDUCATIONAL INSTITUTIONS IN VARIOUS ACADEMIC LEVELS. THE ASSESSEE ENJOYS SE CTION 12AA REGISTRATION AS WELL SINCE 17.10.2003. IT RAISED THE ABOVE DEPRECIATION CLAIM AMOUNTING TO RS.5 77 27 323/-. THE ASSESSING OFFICER NOTICED IT TO HAVE CLAIMED AN AMOUNT OF RS.10 59 74 849/- AS CAPITAL EXPENDITURE INCURRED T OWARDS CARRYING ITS ABOVE EDUCATIONAL ACTIVITY. HE WAS OF THE VIEW THAT THE ABOVE DEPRECIATION CLAIM THEREFORE AMOUNTED TO A CASE OF DOUBLE DEDUCTION I. E. BOTH TOWARDS CAPITAL EXPENDITURE AS WELL AS WHILST COMPUTING INCOME OF T HE RELEVANT PREVIOUS YEAR. HE THEREFORE QUOTED HONBLE APEX COURTS DECISION HERE INABOVE AS WELL AS HONBLE KERALA HIGH COURTS DECISION IN LISSIE MEDICAL INST ITUTIONS VS. CIT 348 ITR 344 (KERLA) TO CONCLUDE THAT THE DEPRECIATION CLAIM IN QUESTION WOULD NOT BE ADMISSIBLE TO ASSESSEE. ALL THIS REASONING RESULTED IN THE IM PUGNED DISALLOWANCE OF RS.5 77 27 323/- BEING MADE IN ASSESSEES HANDS IN ASSESSMENT ORDER DATED 18.03.2014. 3. THE CIT(A) REVERSES ASSESSING OFFICERS ACTION A S UNDER: 3.2 I HAVE CAREFULLY CONSIDERED THE ABOVE SUBMISSI ON AND CASE LAWS RELIED UPON BY THE APPELLANT. REGARDING ALLOWANCE OF DEPRECIATION AS CATEGORICALLY MENTIONED IN THE CASE OF CIT(A) V/S. TINY TOTS EDUCATION SOCIETY) (2 011) 330 ITR 21 THE HON. PUNJAB & HARYANA HAS DISTINGUISHED THE JUDGMENT OF HON. SU PREME COURT IN THE CASE OF ESCORTS LTD. V/S. UOI (199 ITR 43). THE APPELLANT ALSO RELIED ON THE FOLLOWING DECISIONS IN SUPPORT OF ITS CONTENTIONS. (I) CIT V/S. SHRI PLOT SWETAMBER MURTIPUJAK JAIN MA NDAL (1989) 211 ITR 293(GUJ.). (II) CIT V/S SHETH MANILAL RANCHHODDAS VISHRAM BHAV AN TRUST (198ITR598)(GUJ.) (III) CIT V/S. TINY TOTS EDUCATION SOCIETY (330 ITR 21)(P&H) (IV) CIT V/S. MARKET COMMITTEE PIPLL 330 ITR 16 (P&H) ITA NO. 1627/AHD/15 [ ITO VS. NIRMA UNIVERSITY] A.Y. 2011-12 - 3 - (V) CIT V/S. MAHARAJA AGGARSAIN MEDICAL EDUCA TION & SCIENTIFIC RESEARCH SOCIETY ITA NO.750 OF 2010 DTD. 06.01.11 (VI) CIT VS. MANAV MANGAL SOCIETY 328 ITR 421 (P & H) (VII) CIT(A)-XXI AHMEDABAD PASSED APPEAL ORDER NO .CLT(A)-XXI/888/10-11 DTD.17-09-2012 IN THE CASE OF NIRMA EDUCATION & RES EARCH FOUNDATION FOR A.Y. 2008-09. (VIII) AHMEDABAD TRIBUNAL ORDER VIDE ITA NO.1216/A HD/2011 DTD.29-01-2015 IN THE CASE OF APPELLANT FOR A.Y. 2008-09 HON'BLE GUJARAT HIGH COURT ORDER DTD. 09-08-2012 IN THE CASE OF DIT (EXEMPTION) V/S. AHMEDABAD SOUTH INDIAN CHARITABLE TRUST HAS CONSIDERED THE DECISION OF HON. SUPREME COURT IN THE CASE OF ESCOR TS LTD. 199 ITR 43 RELIED UPON BY THE A.O. AND HAS CONFIRMED THAT DEPRECIATION WILL B E ALLOWED IN THE CASE OF TRUST. LD.CLT(A)-XXI AHMEDABAD IN THE CASE OF NAGRI MUNIC IPAL RESEARCH FOUNDATION TRUST VIDE APPEAL NO. CLT(A)-XXI/395/11-12 DTD. 27- 05-2014 FOR A.Y. 2010-11 FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S. SHETH MANILAL RACHHODDAS VISHRAM BHAVANTRUST198 ITR 598 A LLOWED THE CLAIM OF DEPRECIATION. THE LD.CIT(A)-XX AHMEDABAD ALLOWED T HE CLAIM OF DEPRECIATION IN THE CASE OF BANASKANTHA DISTRICT KELVANI MANDAL FOR A.Y.2006-07 & 2008-09 VIDE APPEAL NO. CIT(A)-XXI/744 & 747/ITO(EXM)/13-14 DTD. 13-11- 2014 FOLLOWING THE VARIOUS JUDGMENTS/DECISIONS OF JURISDICTIONAL HIGH COURT/LT AT INCLUDING THE DECISION OF HON. IT AT 'D' BENCH AHMEDABAD IN THE CASE OF ITO (EXEM PTION) BHAVNAGAR V/S. SARDAR PUBLIC CHARITABLE TRUST BOTAD. THE APPELLANT ALSO BROUGHT TO MY NOTICE THE ORDER PASSED BY HON. ITAT AHMEDABAD IN ITS EASE FOR A.Y. 2008-09 VIDE ITA NO.1216/AHD/20L1 DTD.29/01/2015 WHEREIN THE CLAIM O F DEPRECIATION WAS ALLOWED TO THE APPELLANT. FOLLOWING THE ABOVE ORDERS OF ID. CL T(A) HON. ITAT & JURISDICTIONAL HIGH COURT I HOLD THAT APPELLANT IS ENTITLED FOR CL AIM OF DEPRECIATION. ACCORDINGLY THIS GROUND OF APPEAL RAISED BY THE APPELLANT IS AL LOWED. 4. LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY ARG UES IN FAVOUR OF THE IMPUGNED DISALLOWANCE. HIS CASE IS THAT THE ASSESS ING OFFICER HAD RIGHTLY HELD ASSESSEES CLAIM TO BE AN INSTANCE OF DOUBLE DEDUCT IONS. WE SOUGHT TO KNOW ABOUT THE FINALITY OF CIT(A)S ORDER IN PRECEDING ASSESSM ENT YEAR ON THE VERY ISSUE. THE ASSESSEE FILES BEFORE US COPY OF A CO-ORDINATE BENC H ORDER IN THIS REGARD DATED 29.01.2015 REJECTING REVENUES IDENTICAL SUBSTANTIV E GROUND AS UNDER: 2. ASSESSEE TRUST IS A CHARITABLE TRUST REGISTERED WITH INCOME-TAX DEPARTMENT. ASSESSING OFFICER REJECTED THE CLAIM OF DEPRECIATIO N. HE RELIED ON DECISION OF HON'BLE SUPREME COURT IN CASE OF ESCORTS LTD. VS. UNION OF INDIA (1993) 199 ITR 43 (SC). HOWEVER FACTS OF ESCORTS LTD. ARE NOT APPLICABLE T O ASSESSEE. ESCORTS LTD IS NOT A CHARITABLE TRUST. IN VIEW OF ABOVE CIT(A) ALLOWED DEPRECIATION. SAME HAS BEEN OPPOSED BEFORE US. IN THIS REGARD LEARNED AUTHORI ZED REPRESENTATIVE RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN TAX APPEA L NO. 933 OF 2010 WITH 934 TO ITA NO. 1627/AHD/15 [ ITO VS. NIRMA UNIVERSITY] A.Y. 2011-12 - 4 - 936 OF 2010 IN CASE OF DIRECTOR OF INCOME TAX (EXEM PTION) VS. AHMEDABAD SOUTH INDIAN ASSOCIATION CHARITABLE TRUST WHEREIN ASSESS ING OFFICER DISALLOWED THE DEPRECIATION. MATTER TRAVELLED UP TO TRIBUNAL WHE REIN FOLLOWING DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF COMMISSIONER OF INCOM E-TAX VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST REPORTED IN (1992) 198 ITR 598 (GUJ.) DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. WE FIND THAT IN S HETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST (SUPRA) IN WHICH COURT HAD FOLLOWED EA RLIER DECISION OF KARNATAKA AND MADHYA PRADESH HIGH COURTS IN CASE OF CIT VS. SOCIE TY OF THE SISTERS OF ST. ANNE (1984) 146 ITR 28 (KAR.) AND CIT VS. RAIPUR PALLOTT INE SOCIETY (1989) 180 ITR 579 (MP) HAVE DECIDED THE ISSUE IN FAVOUR OF ASSESSEE B Y OBSERVING AS UNDER: 'WHETHER DEPRECIATION HAS TO BE ALLOWED AS A NECESS ARY DEDUCTION FOR COMPUTING THE INCOME OF A CHARITABLE INSTITUTION WA S THE QUESTION WHICH CAME UP BEFORE THE KARNATAKA HIGH COURT IN CIT V. SOCIET Y OF THE SISTERS OF ST. ANNE (1984) 146 ITR 28. NOTICING THE DIFFERENCE BETWEE N THE WORD 'INCOME' AND THE EXPRESSION 'TOTAL INCOME' AND THE NECESSITY FO R PROVIDING DEPRECIATION IN ORDER TO MAINTAIN CORRECT ACCOUNTS THE HIGH COU RT HELD THAT THE AMOUNT OF DEPRECIATION DEBITED TO THE ACCOUNTS OF THE CHARITA BLE INSTITUTION HAS TO BE DEDUCTED TO ARRIVE AT THE INCOME AVAILABLE FOR APPLICATION TO CHARITABLE AND RELIGIOUS PURPOSES. SAME VIEW HAS BEEN TAKEN B Y THE MADHYA PRADESH HIGH COURT IN CIT V RAIPUR PALLOTTINE SOCIETY (198 9) 180 ITR 579. 'IN CIT V. RAO BAHADUR CALAVALA CUNNAN CHETTY CHANT IES (1982) 135 ITR 485 THE MADRAS HIGH COURT WAS REQUIRED TO CONSIDER WHETHER FOR THE PURPOSE OF COMPUTING ACCUMULATION IN EXCESS OF 25 P ER CENT AS LAID DOWN IN SECTION 11(1)(A) OF THE ACT 'INCOME' HAS TO BE COMPUTED UNDER THE VARIOUS HEADS ENUMERATED IN THE INCOME-TAX ACT. IT HELD TH AT THE INCOME FROM THE PROPERTIES HELD UNDER TRUST WOULD HAVE TO BE ARRIVE D AT IN THE NORMAL COMMERCIAL MANNER WITHOUT CLASSIFICATION UNDER THE VARIOUS HEADS SET OUT IN SECTION 14. IT HELD THAT THE EXPRESSION 'INCOME' HA S TO BE UNDERSTOOD IN THE POPULAR OR GENERAL SENSE AND NOT IN THE SENSE IN WH ICH THE INCOME IS ARRIVED AT FOR THE PURPOSE OF ASSESSMENT TO TAX BY APPLICATION OF SOME ARTIFICIAL PROVISIONS EITHER GIVING OR DENYING DEDUCTION. IT O BSERVED THAT THE COMPUTATION UNDER THE DIFFERENT CATEGORIES OR HEADS ARISES ONLY FOR THE PURPOSES OF ASCERTAINING THE TOTAL INCOME FOR THE P URPOSES OF CHARGE. THOSE PROVISIONS CANNOT BE INTRODUCED TO FIND OUT WHAT TH E INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST TO BE EXCLUDED FROM THE T OTAL INCOME IS FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER III. 'WE ARE IN RESPECTFUL AGREEMENT WITH THE VI EW TAKEN BY THE KARNATAKA MADHYA PRADESH AND MADRAS HIGH COURTS. WE THEREFORE ANSWER BOTH THE QUESTIONS REFERRED TO US IN THE AFFIRMATIV E AND AGAINST THE REVENUE. NO ORDER AS TO COSTS. ' FOLLOWING THE SAME HONBLE GUJARAT HIGH COURT IN AH MEDABAD SOUTH INDIAN ASSOCIATION CHARITABLE TRUST (SUPRA) HAS DECIDED TH E ISSUE IN FAVOUR OF ASSESSEE. THUS THE ISSUE BEFORE US I.E. ALLOWABILITY OF DEPR ECIATION OF RS.6 47 32 014/- IS DECIDED IN FAVOUR OF ASSESSEE. 5. COUPLED WITH THIS IT IS BROUGHT TO OUR NOTICE T HAT THE LEGISLATURE HAS ALSO INSERTED AMENDMENT IN SECTION 11(6) OF THE ACT VIDE FINANCE ACT (NO.2) OF 2014 W.E.F. 01.04.2014 TO THE EFFECT THAT SUCH A CLAIM W OULD NOT BE ADMISSIBLE FROM ITA NO. 1627/AHD/15 [ ITO VS. NIRMA UNIVERSITY] A.Y. 2011-12 - 5 - PROSPECTIVE EFFECT ONLY. LEARNED COUNSEL THEN QUOT ES HONBLE KARNATAKA HIGH COURTS DECISION IN DIT(E) VS. AL-AMEEN CHARITABLE FUND TRUST HOLDING THE ABOVE AMENDMENT NOT TO BE HAVING RETROSPECTIVE EFFECT. W E REITERATE THAT WE ARE DEALING WITH ASSESSMENT YEAR 2011-12. WE THEREFORE TAKE IN TO ACCOUNT THE ABOVE LEGAL AND FACTUAL POSITION TO AFFIRM THE CIT(A)S FINDINGS UN DER CHALLENGE. 5. THIS REVENUES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THE 29 TH DAY OF NOVEMBER 2017.] SD/- SD/- (PRADIP KUMAR KEDIA) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 29/11/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ --. . /0 / DR ITAT AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0