ITO, Coimbatore v. M/s,. Kovai Medical Centre and Educatiional Trust, Coimbatore

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI BEFORE DR. O.K.NARAYANAN VICE-PRESIDENT AND SHRI S.S.GODARA JUDICIAL MEMBER ITA NO. 1772/(MDS)/2012 ASSESSMENT YEAR : 2009-10 THE INCOME-TAX OFFICER COMPANY WARD-I 1 ST FLOOR 63 RACE COURSE COIMBATORE 641 018. VS. M/S. KOVAI MEDICAL CENTRE AND EDUCATIONAL TRUST KMCH CAMPUS AVINASHI ROAD COIMBATORE 641014. PAN AAATK2825P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N.BETGER I IRS JCIT RESPONDENT BY : SHRI K. RAGHU CA DATE OF HEARING : 7 TH OCTOBER 2013 DATE OF PRONOUNCEMENT : 7 TH OCTOBER 2013 O R D E R PER DR.O.K.NARAYANAN VICE PRESIDENT THIS APPEAL FILED BY THE REVENUE RELATES TO THE ASSESSMENT YEAR 2009-10. THE APPEAL IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-I AT COIMBATORE DATED 9.7.2012. THE APPEAL ARISES OUT OF THE ITA 1772/12 :- 2 -: ASSESSMENT COMPLETED UNDER SEC.143(3) OF THE INCOME -TAX ACT 1961. 2. THE ASSESSEE IS A CHARITABLE INSTITUTION. WHIL E COMPLETING THE ASSESSMENT THE ASSESSING OFFICER HA S REJECTED THE CLAIM OF DEPRECIATION IN COMPUTING THE INCOME U NDER SEC.11(1) AS MADE BY THE ASSESSEE TRUST ON THE GROUND THAT T HE COST INCURRED BY THE ASSESSEE AS ADDITION MADE TO FIXED ASSETS HAS ALREADY BEEN TREATED AS APPLICATION OF FUNDS FOR CH ARITABLE PURPOSES AND THEREFORE A FURTHER CLAIM OF DEPRECIA TION WOULD AMOUNT TO DOUBLE DEDUCTION WHICH IS NOT PERMISSIBL E IN LAW. 3. IN FIRST APPEAL THE COMMISSIONER OF INCOME- TAX(APPEALS) HELD THAT THE CLAIM OF DEPRECIATION MA DE BY THE ASSESSEE SHOULD BE ALLOWED EVEN IF CAPITAL EXPEND ITURE INCURRED BY THE ASSESSEE HAS BEEN TREATED AS APPLICATION OF FUNDS FOR CHARITABLE PURPOSES. IN ORDER TO COME TO THE ABOVE CONCLUSION THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS RELIED ON THE JUDGMENTS OF THE HONBLE PUNJAB & HARYANA HIGH COUR T RENDERED IN THE CASES OF CIT VS. MARKET COMMITTEE PIPLI (33 0 ITR 16) AND CIT VS. TINY TOTS EDUCATION SOCIETY (330 ITR 21). THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ALSO PLACED RELIANCE ON THE DECISIONS OF INCOME-TAX APPELLATE TRIBUNAL CHENNAI ITA 1772/12 :- 3 -: BENCHES IN THE CASES OF GKR CHARITIES VS. DDIT (EXE MPTIONS) AND RENGALATCHUMI EDUCATIONAL TRUST VS. ITO. 4. THE REVENUE IS AGGRIEVED AND THEREFORE THE SE COND APPEAL BEFORE THE TRIBUNAL. 5. THE ONLY RELEVANT GROUND RAISED BY THE REVENUE IS THAT THE DECISIONS RELIED ON BY THE COMMISSIONER OF INCOME- TAX(APPEALS) AS RENDERED BY THE TRIBUNAL HAVE NOT BEEN ACCEPTED BY THE DEPARTMENT AND MATTERS ARE BEING TA KEN IN APPEALS BEFORE THE HONBLE MADRAS HIGH COURT. 6. BUT IN ADDITION TO THE DECISIONS OF INCOME-TAX APPELLATE TRIBUNAL THE COMMISSIONER OF INCOME-TAX( APPEALS) HAS ALSO PLACED RELIANCE ON THE DECISIONS OF THE HONBL E PUNJAB & HARYANA HIGH COURT REFERRED TO IN PARAGRAPH ABOVE. THERE IS NO DECISION OF JURISDICTIONAL HIGH COURT AGAINST THE P ROPOSITIONS ARGUED BY THE REVENUE. WHEN THAT IS THE CASE AS H ELD BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETA BLE PRODUCTS LTD. 88 ITR 192 THE DECISIONS FAVOURABLE TO THE A SSESSEE RENDERED BY THE HONBLE COURTS HAVE TO BE ACTED UPO N. THEREFORE WE FIND THAT THE COMMISSIONER OF INCOME- TAX(APPEALS) IS JUSTIFIED IN ACCEPTING THE CONTENTIONS ADVANCED BY THE ASSESSEE. ITA 1772/12 :- 4 -: 7. IN RESULT THIS APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY THE 7 TH OF OCTOBER 2013 AT CHENNAI. SD/- SD/- (S.S.GODARA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI DATED THE 7 TH OCTOBER 2013. MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.