The ACIT, Ratlam v. M/s Krishi Upaj Mandi Samiti, Ratlam

ITA 227/IND/2011 | 2008-2009
Pronouncement Date: 16-02-2012 | Result: Dismissed

Appeal Details

RSA Number 22722714 RSA 2011
Assessee PAN ERTHE1972A
Bench Indore
Appeal Number ITA 227/IND/2011
Duration Of Justice 5 month(s) 7 day(s)
Appellant The ACIT, Ratlam
Respondent M/s Krishi Upaj Mandi Samiti, Ratlam
Appeal Type Income Tax Appeal
Pronouncement Date 16-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 16-02-2012
Assessment Year 2008-2009
Appeal Filed On 08-09-2011
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.227/IND/2011 A.Y. 2008-09 ASSTT. COMMISSIONER OF INCOME TAX RATLAM ... APPELLANT VS KRISHI UPAJ MANDI SAMITI RATLAM PAN AAALK-0396F ... RESPONDENT ITA NO.228/IND/2011 A.Y. 2008-09 ASSTT. COMMISSIONER OF INCOME TAX RATLAM ... APPELLANT VS KRISHI UPAJ MANDI SAMITI NEEMUCH PAN AAALK-0424A ... RESPONDENT 2 DEPARTMENT BY : SHRI KESHAV SAXENA ASSESSEE BY : SHRI VISHAL NAHAR ITA NO. 229/IND/2011 A.Y. 2008-09 ASSTT. COMMISSIONER OF INCOME TAX RATLAM ... APPELLANT VS KRISHI UPAJ MANDI SAMITI SHAMGARH DISTT. MANDSAUR PAN AAALK-0523A ... RESPONDENT DEPARTMENT BY : SHRI ARUN DEWAN ASSESSEE BY : SHRI SANJAY AGRAWAL AND ITA NO. 230/IND/2011 A.Y. 2006-07 ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 2 UJJAIN ... APPELLANT VS KRISHI UPAJ MANDI SAMITI PACHORE (RAJGARH) PAN AAALK- 0523A ... RESPONDENT 3 DEPARTMENT BY : SHRI ARUN DEWAN ASSESSEE BY : NONE DATE OF HEARING : 16.2.2012 DATE OF PRONOUNCEMENT : 16.2.2012 O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THE REVENUE IS AGGRIEVED BY DIFFERENT IMPUGNED ORD ERS ALL DATED 30.6.2011 ON THE FOLLOWING COMMON GROUNDS :- 1. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN DIRECTING THAT THE ADDITION OF RS.2 08 95 084/- (ITA NO. 227/IND/2011 RS. 2 24 29 095/- (ITA NO. 228/IND/2011) RESPECTIVELY MADE TO THE INCOME BE DELETED AS THE ASSESSEE WAS COVERED BY EXEMPTION U/ S 11 OF THE ACT 2. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN LAW IN DIRECTING THAT THE RETURNED INCOME BE ACCEPTED AND EXEMPTION U/S 11 OF THE ACT BE GRANTED ESPECIALLY WHEN THE ASSESSEE HAS NOT APPLIED THE INCOME TO THE EXTENT OF 85% AND DID NOT FULFIL THE CRITERIA FOR SETTING APART THE ACCUMULATION AS LAID DOWN IN SECTION 11(2) OF THE ACT. 3. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF PAYMENT TO KISSAN SADAK NIDHI (ITA NOS. 229 AND 230/IND/2011) IN SPITE OF THE FACT THA T THE AMOUNT PAID IN CONTRIBUTION CANNOT BE TREATED AS 4 EXPENDITURE U/S 36(1)(XII) AND/OR UNDER SECTION 37( 1) OF THE ACT 4. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN LAW IN DELETING THE ADDITION MADE ON ACCOU NT OF EXCESS CLAIM OF DEPRECIATION IN SPITE OF THE FACT T HAT DEPRECIATION TO THE EXTENT OF RS.5 67 944/- IS NOT ALLOWABLE IN VIEW OF EXPLANATION 5 TO SECTION 32(1) OF THE ACT. 2. DURING HEARING OF THESE APPEALS WE HAVE HEARD T HE LEARNED RESPECTIVE COUNSEL IN ALL THE APPEALS EXCEP T IN ITA NO. 230/IND/2011 IN WHICH NOBODY APPEARED ON BEHALF OF KUMS PACHORE (RAJGARH). ON THE OTHER HAND ON BEHALF OF THE REVENUE THE LEARNED CIT DR SHRI KESHAV SAXENA AND SHRI ARUN DEWAN LEARNED SR. DR WERE HEARD. 2.1 THE LEARNED RESPECTIVE COUNSEL FOR THE ASSESSE E DEFENDED THE IMPUGNED ORDERS WHEREAS THE LEARNED CI T DR/SENIOR DR SUPPORTED THE ASSESSMENT ORDERS. MR. S AXENA CONTENDED THAT RELIEF HAS BEEN GRANTED TO THE ASSES SEE IGNORING THE FACT THAT THE ASSESSEE DID NOT APPLY 8 5% OF THE INCOME OUT OF THE TOTAL ACCUMULATION THEREFORE IT IS A VIOLATION OF SECTION 11(2) OF THE ACT. 5 2.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. IN THE CAS E OF KRISHI UPAJ MANDI SAMITI JAORA THE FACTS IN BRIEF ARE TH AT THE ASSESSEE IS A LOCAL AUTHORITY ENGAGED IN PROMOTION OF AGRICULTURAL ACTIVITIES OF NEARBY FARMERS BY PROVID ING FACILITIES TO SUCH FARMERS. THE MAIN SOURCE OF RECEIPT OF THE AS SESSEE IS MANDI SHULK WHICH IS RECOVERED FROM MANDI VYAPARIE S WHILE PURCHASING THE AGRICULTURAL PRODUCE FROM THE FARMER S. THE ASSESSEE WAS GRANTED REGISTRATION U/S 12A OF THE AC T BY THE DEPARTMENT. THE CLAIM OF THE ASSESSEE IS THAT THE A CCUMULATION OF INCOME IS LESS THAN 15% AS THE REMAINING 85% OF ACCUMULATION WAS APPLIED FOR THE PURPOSES AS CONTAI NED IN THE OBJECTS. THE LEARNED ASSESSING OFFICER MADE DISALL OWANCE OF THE AMOUNT OF RS.2 08 95 084/- AND FURTHER MADE ADD ITION OF RS.21 16 243/- IN THE FIXED ASSETS AGAINST NIL INCO ME DECLARED BY THE ASSESSEE IN ITS RETURN ON 30.9.2008. THE ASS ESSEE FURNISHED ITS AUDITED REPORT IN FORM NO. 10B (FORM NO. 3CB AND 3CD) ALONG WITH INCOME AND EXPENDITURE ACCOUNT BAL ANCE- SHEET AND ANNEXURE ANNEXED WITH THE RETURN. THE ASS ESSEE 6 RAISED OBJECTIONS OF REJECTION OF CLAIM MADE U/S 11 . THE ASSESSEE SET APART RS. 2 08 95 084/- FOR APPLICATIO N FOR CHARITABLE PURPOSES WHEREAS THE ASSESSING OFFICER A SSESSED THE SAME AS BUSINESS INCOME BY TREATING THE ASSESSE E TO BE CARRYING THE BUSINESS ACTIVITIES. IN THE IMPUGNED ORDER LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO REPRO DUCED (IN PARA 4.1) THE OBJECTS OF THE ASSESSEE SAMITI. 2.3 IN THE IMPUGNED ORDER WE FIND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS DULY CONSI DERED THE SUBMISSIONS OF THE ASSESSEE BY KEEPING THEM IN JUXTAPOSITION WITH THE FACTS AND THE CONTENTIONS/RE ASONS CONTAINED IN THE ASSESSMENT ORDER ALONG WITH VARIOU S DECISIONS FROM THE TRIBUNALS AND HON'BLE HIGH COURTS. THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS DULY CONSI DERED THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COU RT AND DISMISSAL OF SLP OF THE DEPARTMENT BY HON'BLE APEX COURT (SLP NO. 27701/2008 DATED 10.11.2008) BY FURTHER OB SERVING THAT THE OBSERVATION MADE BY THE HON'BLE MADHYA PRA DESH HIGH COURT HAS ATTAINED FINALITY. THE OBSERVATION AS CONTAINED 7 IN PARA 5.1 OF THE IMPUGNED ORDER IS REPRODUCED HER EUNDER FOR READY REFERENCE :- 5.1 THE APPELLANT MANDI SAMITI IS A STATUTORY BODY ESTABLISHED UNDER MADHYA PRADESH KRISHI UPAJ MANDI SAMITI ADHINIYAM 1972. THE OBJECT TO ESTABLISH MA RKET COMMITTEE AND BOARD IS TO REGULATE PURCHASE SALE STORAGE AND PROCESSING OF AGRICULTURAL PRODUCE THRO UGH ESTABLISHMENT OF MARKET COMMITTEES MARKET YARDS AN D TRUSTS. THE DOMINANT OBJECT OF BOARD AND COMMITTEES ARE TO SAVE AGRICULTURISTS FROM EXPLOITATION OF MID DLEMAN AND TO PROVIDE REMUNERATIVE PRICE TO THE AGRICULTUR ISTS. IT IS FURTHER TO PROVIDE BETTER FACILITIES FOR STORAGE AND TRANSPORTATION OF FOOD GRAINS. THUS THE OBJECT OF THE BOARES AND COMMITTEES IS TO ADVANCE OBJECTS OF GENE RAL PUBLIC UTILITY. IT MAY ALSO BE MENTIONED THAT THE SIMILAR MARKET COMMITTEES HAVE BEEN SET UP IN PUNJAB HARYANA MAHARASHTRA RAJASTHAN OTHER PARTS OF MADHYA PRADESH AND OTHER STATES. IN EVERY STATE T HE ARRANGEMENT FOR FUNDS AND ITS BIFURCATION/ALLOTMENT COLLECTED BY AND UTILISATION OF THE SAME ARE ALMOST IDENTICAL. THEIR BOARDS OF PERSONS WHO EXERCISE TH E CONTROL AND SUPERINTENDENTS OF MANDI SAMITI ARE THE SAME IN ALL STATES. IN CASE OF CIT V. KRISHI UPAJ MANDI SAMITI (2009) 308 ITR 401 JURISDICTIONAL HON'BLE HIGHCOURT OF M.P. WHILE GRANTING THE REGISTRATION U/S 12A AND 12AA OF THE IT ACT HAS OBSERVED THAT KRISH I PAJ MANDIS DO NOT HAVE ANY COMMERCIAL ACTIVITY BUT ARE CONSTITUTED UNDER THE PROVISIONS OF THE MADHYA PRAD ESH KRISHI UPAJ MANDI ADHINIYAM 1972 TO PROTECT THE INTEREST OF THE FARMERS AND ENSURE THAT THEY ARE NO T EXPLOITED. THE PREAMBLE TO THE ADHINIYAM 1972 UNDE R WHICH THE KRISHI UPAJ MANDI IS ESTABLISHED REFERS T O PROVIDING FOR BETTER REGULATION OF BUYING AND SELLI NG OF AGRICULTURAL PRODUCE AND THE ESTABLISHMENT AND PROP ER ADMINISTRATION OF MARKETS OF AGRICULTURAL PRODUCE I N THE STATE OF M.P. UNDER THE 1972 ADHINIYAM THE MARKET COMMITTEE CHARGES FEES FOR VARIOUS PURPOSES WHICH HAVE THE NECESSARY NEXUS WITH THE SERVICE RENDERED AND THUS QUID PRO QUO. MERELY BECAUSE THEY CHARGE A F EE 8 THAT DOES NOT MILITATE AGAINST THE ALTRUISTIC PURPO SE FOR WHICH THESE MANDIS ARE ESTABLISHED. THE CONCLUSION DRAWN IN THE IMPUGNED ORDER IS REPRO DUCED HEREUNDER :- 5.5 IN VIEW OF FACTS ABOVE AND KEEPING IN VIEW OF THE DECISION OF MY PREDECESSOR IN THE ASSESSEES CA SE FOR A.Y. 07-08 DATED 26.11.2010 AND IN ABSENCE OF A NY ADVERSE MATERIAL OR FINDING ON RECORD TO SHOW THAT THE APPELLANT HAS ESTABLISHED OR CARRIED OUT ACTIVITIES FOR PERSONAL OR PRIVATE GAINS THE A.O. WAS NOT RIGHT I N TREATING THE APPELLANT AS NON-CHARITABLE INSTITUTIO N. FURTHER ONCE AN INSTITUTION HAS BEEN GRANTED REGISTRATION U/S 12A OF THE ILT ACT THE A.O. IS PR IMA FACIE BOUND BY SUCH REGISTRATION UNLESS SPECIFICALL Y CANCELLED OR WITHDRAWN BY THE PRESCRIBED AUTHORITY. THE SAME VIEW HAS BEEN HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF ADDL. CIT V. SURAT CITY JHIMKH ANA (2008) 300 ITR 214 AND M.P. MADHYAM VS. CIT (2000 256 ITR 277 (MP). SINCE THE A.O. HAS NOT BROUGHT AN Y MATERIAL ON RECORD TO SHOW THAT THE APPELLANT HAS VIOLATED ANY OF THE PRESCRIBED CONDITIONS IT IS EN TITLED FOR EXEMPTION U/S 11. THUS THE AMOUNT SET APART FOR APPLICATION FOR CHARITABLE PURPOSES OF THE TRUST CA NNOT BE ASSESSED AS APPELLANTS INCOME. ACCORDINGLY THE ADDITION OF RS. 2 08 95 084/- IS HEREBY DELETED. 2.4 IF THE CONCLUSION DRAWN IN THE IMPUGNED ORDER/ASSESSMENT ORDER AND THE FACTS NARRATED BEFOR E US IS ANALYSED WE FIND THAT SO FAR AS THE MEANING OF EXP RESSION GENERAL PUBLIC UTILITY IS CONCERNED IT HAS BEEN ELABORATELY DISCUSSED BY THE HON'BLE APEX COURT IN THE CASE OF ANDHRA CHAMBER OF COMMERCE; 55 ITR 722 (SC) BY HOLDING THA T THE 9 EXPRESSION IS NOT RESTRICTED TO OBJECTS BENEFICIAL TO WHOLE MANKIND. AN OBJECT BENEFICIAL TO A SECTION OF THE P UBLIC IS ALSO AN OBJECT OF GENERAL PUBLIC UTILITY MEANING THEREBY TO COVER UNDER CHARITABLE PURPOSES IT IS NOT NECESSARY THAT THE OBJECT SHOULD BE BENEFICIAL TO WHOLE MANKIND OR THE PERSON S LIVING IN A PARTICULAR COUNTRY. IT IS SUFFICIENT IF THE INTENT ION IS TO BENEFIT A SECTION OF THE PUBLIC AS DISTINGUISHED FROM SPECIFI C INDIVIDUAL. THE INCURRING OF EXPENSES OR EXPENDING THE EXPENSES OF THE MARKET COMMITTEE HAS BEEN GIVEN ALONG WITH ITS PURP OSES IN SECTION 39 OF KRISHI UPAJ MANDI SAMITI ADHINIYAM 1 972. THERE IS AN UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT THE GROSS RECEIPTS ARE TO THE TUNE OF RS.14 95 27 302/- OUT OF WHICH THE ASSESSEE INCURRED EXPENDITURE TO THE TUNE OF RS.12 70 98 208/- INCLUDING CAPITAL EXPENDITURE OF RS.1 30 55 046/- AND DEPRECIATION OF RS.67 79 564/- MEANING THEREBY THE ASSESSEE APPLIED MORE THAN 85% OF ITS T OTAL RECEIPTS FOR CHARITABLE OBJECTS (PAGES 56 TO 70 OF THE PAPER BOOK). A CONJOINT READING OF SECTIONS 11 12 AND 1 2A OF THE ACT MAKES IT CLEAR THAT REGISTRATION U/S 12A IS A CONDI TION PRECEDENT 10 FOR AVAILING BENEFIT U/S 11 AND 12. UNLESS AND UNT IL AN INSTITUTION IS REGISTERED U/S 12A IT CANNOT CLAIM THE BENEFIT OF SECTION 11(1)(A) OF THE ACT. IF SECTION 11(1)(A) O F THE ACT HAS FULLY EXPLOITED AND THERE IS STILL ACCUMULATED INCO ME LEFT TO BE DEALT WITH SUB-SECTION (2) OF SECTION 11 CAN BE PR ESSED IN SERVICE AND IF IT IS COMPLIED WITH SUCH ADDITIONAL ACCUMULATED INCOME BEYOND THE PRESCRIBED PERCENTAGE CAN ALSO EA RNED EXEMPTION U/S 11(2) OF THE ACT. OUR VIEW IS FORTIFI ED BY THE DECISION FROM HON'BLE APEX COURT IN ADDITIONAL CIT V. ALN RAO CHARITABLE TRUST; 216 ITR 679 (SC). THE ACCUMULATED INCOME WHICH IS EXEMPT U/S 11(1)(A) NEED NOT BE INVESTED I N THE GOVERNMENT SECURITIES. IT IS ONLY IN RESPECT OF AN Y ADDITIONAL ACCUMULATED INCOME BEYOND THE PRESCRIBED PERCENTAGE THAT IF THE ASSESSEE WANTS EXEMPTION OF THIS ADDITIONAL ACC UMULATION INCOME ALSO THE ASSESSEE IS REQUIRED TO INVEST THE ADDITIONAL ACCUMULATED INCOME IN THE MANNER LAID DOWN IN SECTI ON 11(2) AFTER FOLLOWING THE PROCEDURE LAID DOWN THEREIN. I T IS NOT CORRECT TO EQUATE THE WORD APPLIED WITH THE WORD SPENT. IF THE LEGISLATURE INTENDED THAT THE AMOUNT SHOULD ACTUALL Y BE SPENT 11 THERE WAS NOT NOTHING PREVENTING IT FROM USING THAT WORD. OUR VIEW IS FORTIFIED BY THE DECISION IN CIT VS. TRUSTE ES OF H.E.H. THE NIZAMS CHARITABLE TRUST; 131 ITR 497 (AP) AND C IT VS. RADHA SWAMI SATSANG SABHA; 25 ITR 472 (ALL). SINCE THE ASSESSEE HAS APPLIED MORE THAN 85% OF THE TOTAL ACC UMULATION THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE CONC LUSION DRAWN IN THE IMPUGNED ORDER ON THE ISSUE THEREFORE IT IS A FFIRMED. OUR CONCLUSION WILL COVER BOTH THE GROUNDS OF ITA NO. 2 27 AND 228/IND/2011 THEREFORE BOTH THESE APPEALS OF THE REVENUE ARE DISMISSED. 3. IN ITA NO. 229/IND/2011 THE ONLY GROUND PERT AINS TO DELETING THE ADDITION OF KISSAN SADAK NIDHI. AFTER HEARING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE IS COVER ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI BURHANPUR VS. ITO (2009) 12 ITJ (INDORE TRIBUNAL). THE RELEVANT PORTION FROM THE OR DER IS REPRODUCED HEREUNDER :- 15. ON CONSIDERATION OF RIVAL SUBMISSIONS WE ARE O F THE VIEW THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR O F THE ASSESSEE BY THE ORDER OF ITAT JABALPUR BENCH IN TH E CASE OF KRISHI UPAJ MANDI SAMITI & OTHERS (SUPRA) I N 12 WHICH IN PARA 12 THE TRIBUNAL HELD WE HAVE CAREFU LLY CONSIDERED THE ISSUE. THE VIEW OF THE AO THAT THE PAYMENT MADE TO THE BOARD FOR ROAD DEVELOPMENT AND AGRICULTURAL RESEARCH WAS FOR CAPITAL EXPENDITURE A ND HENCE NOT ALLOWABLE U/S 37 OF THE12ACT CANNOT BE CONSIDERED CORRECT BECAUSE THE PAYMENT WAS MADE AS STATUTORY LIABILITY AS PER SEC. 43 OF THE RELEVANT ACT. SIMILARLY BOARD FEES WERE ALSO MADE AS PER PROVISI ONS OF THE RELEVANT STATUTE AND WAS ALLOWABLE EXPENDITURE. THE AO IS THEREFORE NOT CORRECT TO DISALLOW THE SAME O N THE GROUND THAT THE PAYMENT IN QUESTION WAS IN THE NATU RE OF APPLICATION OF INCOME. IN OUR CONSIDERED OPINION T HE ORDER OF THE LD. CIT(A) DESERVES NO INTERFERENCE. T HE APPEAL OF THE DEPARTMENT IS THEREFORE DISMISSED. WE FIND THAT THE CASE OF THE ASSESSEE IS ON IDENTICAL FACTS BECAUSE THE BOARD FEES IS PAID AS P ER SEC. 43 OF MP KRISHI UPAJ MANDI ADHINIYAM WHICH IS STATU TORY LIABILITY OF THE ASSESSEE TO PAY IN ORDER TO ACHIEV E ITS OBJECTIVES. IT IS THEREFORE ALLOWABLE DEDUCTION AS WAS SPENT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUS INESS OF THE ASSESSEE. AS PER SEC. 36(1)(XII) ANY EXPEND ITURE INCURRED BY THE CORPORATION OR BODY CORPORATE BY WHATEVER NAME CALLED CONSTITUTED OR ESTABLISHED BY CENTRAL STATE OR PROVINCIAL ACT FOR THE OBJECTS AN D PURPOSES AUTHORIZED BY THE ACT FOR WHICH IT WAS ESTABLISHED SHALL BE ALLOWED AS DEDUCTION. THE LD. CIT(A) MISUNDERSTOOD THIS ISSUE BY TREATING THE BOARD FEES TO BE THE TRANSFER OF FUNDS. IN THE AFORESAID SEC. 36(1)( XII) IT IS SPECIFICALLY MENTIONED THAT THE EXPENDITURE INCURRE D COULD HAVE ANY NAME WHATSOEVER THEREFORE THE LD. CIT(A) SHOULD HAVE CONSIDERED THE ISSUE IN THE BROA D PERSPECTIVE CONSIDERING THE NATURE AND FUNCTIONING OF THE ASSESSEE INSTITUTION UNDER THE SPECIAL ACT. IN VIEW OF THE ABOVE THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND ENTIRE ADDITION IS DELETED. THIS GROUND OF APPE AL OF THE ASSESSEE IS ALLOWED. BOTH THE LEARNED REPRESENTATIVES DURING HEARING C ANVASSED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSE E CONSEQUENTLY BY FOLLOWING THE DECISION OF THE TRIB UNAL (SUPRA) AND THE ASSERTION MADE BY THE LEARNED RESPECTIVE CO UNSEL WE AFFIRM THE STAND OF THE LEARNED COMMISSIONER OF INC OME TAX 13 (APPEALS). OUR STAND WILL ALSO COVER FIRST GROUND O F ITA NO. 230/IND/2011 ALSO. 4. THE LAST GROUND RAISED IN ITA NO. 230/IND/2011 P ERTAINS TO EXCESS CLAIM OF DEPRECIATION. THE LEARNED COUNSEL F OR THE ASSESSEE CLAIMED THAT THIS ISSUE IS COVERED IN FAVO UR OF THE ASSESSEE BY THE DECISION FROM HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT V. SHRI GUJARATI SAMAJ (2011) 18 ITJ 255(MP). THE ASSERTION OF THE ASSESSEE WAS NOT CONT ROVERTED BY THE LEARNED CIT DR. WE FIND THAT THE HON'BLE COU RT WHILE COMING TO A PARTICULAR CONCLUSION WHILE DECIDING T HE ISSUE IN FAVOUR OF THE ASSESSEE ALSO CONSIDERED THE DECISIO N OF THE DIVISION BENCH IN THE CASE OF CIT V. RAIPUR PALLOTT INE SOCIETY (1989) 180 ITR 579 (MP) AND HON'BLE KARNATAKA HIGH COURT IN CIT V. SOCIETY OF THE SISTERS OF ST. ANNE; 146 ITR 28 (KARN.). ADMITTEDLY THE DEPRECIATION IS NOTHING BUT DECREAS E IN VALUE OF PROPERTY THROUGH WEAR AND TEAR DETERIORATION OR OB SOLESCENCE. THE OBJECT OF PROVIDING THE DEPRECIATION IS TO SPRE AD THE EXPENDITURE INCURRED IN ACQUIRING THE ASSET OVER ITS EFFECTIVE LIFE TIME. EVEN IF THE LANGUAGE USED IN SECTION 32 OF THE ACT IS 14 ANALYSED IT CAN BE SAID THAT DEPRECIATION ALLOWANC E IS A CONCESSION GRANTED BY THE STATE IN THE COMPUTATION OF INCOME BASED ON VERY MANY FACTORS RELEVANT TO A WHOLESOME FISCAL ADMINISTRATION. DEPRECIATION IS THUS RELATED TO AN ASSET AND IS A NOTIONAL LOSS AS AGAINST ACTUAL LOSS IN THE SENSE O F OUTGOINGS OF THE BUSINESS OR IT CAN BE SAID THAT IT IS A STATUTO RY ALLOWANCE. THIS BENCH OF THE TRIBUNAL IN THE CASE OF JAWAHARLA L NEHRU EDUCATION CHARITABLE TRUST KASRAWAD DISTT. KHARGON E (ITA NO.303/IND/2011) ON THE ISSUE OF DEPRECIATION HEL D AS UNDER - 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON FILE. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE EDUCATION TRUST ENGAGED IN THE ACTIVITIES OF PROVIDING EDUCATIONAL FACILITIES TO THE PUBLIC AT LARGE. THE OBJECTIVES OF THE TRUST ARE COVERED UNDER SECTION 2(15) OF THE ACT. THE ASSESSEE CLAIMED EXEMPTION OF RS. 1 27 89 078/- U/S 11(2) OF THE ACT IN ITS RETURN SHOWING NIL INCOME ON 29.10.2004. THE LEARNED ASSESSING OFFICER DISALLOWED DEPRECIATION BY CLAIMING THAT IT AMOUNTS TO DOUBLE DEDUCTION. ON APPEAL THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BY FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE WHICH IS UNDER CHALLENGE BEFORE THIS TRIBUNAL. BEFORE COMING TO ANY CONCLUSION WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE IMPUGNED ORDER :- 15 4.0 FACTS ON RECORD AS EVIDENCED BY ASSESSMENT ORDER SUBMISSIONS OF APPELLANT AND A.O.S REMAND REPORT HAVE BEEN GONE THROUGH CAREFULLY AND FOLLOWING FINDINGS ARE RECORDED. 4.1 THE ONLY EFFECTIVE GROUND IS AGAINST DISALLOWANCE OF DEPRECIATION OF RS. 5 04 847/-. THE CONTENTIONS OF THE APPELLANT THAT THE APPELLANT IS ENTITLED TO DEPRECIATION ARE SUPPORTED BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHRI GUJRATI SAMAJ (2011) 18 ITJ 255(MP). RESPECTFULLY FOLLOWING THE SAID DECISION DISALLOWANCE OF DEPRECIATION IS HELD TO HAVE NOT BEEN PROPERLY MADE. WE FIND THAT THE HON'BLE COURT WHILE COMING TO A PARTICULAR CONCLUSION WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE ALSO CONSIDERED THE DECISION OF THE DIVISION BENCH IN THE CASE OF CIT V. RAIPUR PALLOTTINE SOCIETY (1989) 180 ITR 579 (MP) AND HON'BLE KARNATAKA HIGH COURT IN CIT V. SOCIETY OF THE SISTERS OF ST. ANNE; 146 ITR 28 (KARN.). ADMITTEDLY THE DEPRECIATION IS NOTHING BUT DECREASE IN VALUE OF PROPERTY THROUGH WEAR AND TEAR DETERIORATION OR OBSOLESCENCE. THE OBJECT OF PROVIDING THE DEPRECIATION IS TO SPREAD THE EXPENDITURE INCURRED IN ACQUIRING THE ASSET OVER ITS EFFECTIVE LIFE TIME. EVEN IF THE LANGUAGE USED IN SECTION 32 OF THE ACT IS ANALYSED IT CAN BE SAID THAT DEPRECIATION ALLOWANCE IS A CONCESSION GRANTED BY THE STATE IN THE COMPUTATION OF INCOME BASED ON VERY MANY FACTORS RELEVANT TO A WHOLESOME FISCAL ADMINISTRATION. DEPRECIATION IS THUS RELATED TO AN ASSET AND IS A NOTIONAL LOSS AS AGAINST ACTUAL LOSS IN THE SENSE OF OUTGOINGS OF THE BUSINESS OR IT CAN BE SAID THAT IT IS A STATUTORY ALLOWANCE. RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT WE FIND NO INFIRMITY IN THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IT IS AFFIRMED. 16 FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL AN D ESPECIALLY THE DECISION OF THE HON'BLE JURISDICTION AL HIGH COURT (SUPRA) WE FIND NO INFIRMITY IN THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IT IS AFFIRMED. IN THE RESULT THE APPEALS OF THE REVENUE ARE DISM ISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESE NCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 16.2.2012. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17.2.2012 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE DN/-