ITO, Pune v. Rajasthani & Gujrati Charitable foundation, Pune

ITA 336/PUN/2009 | 2004-2005
Pronouncement Date: 28-10-2010 | Result: Dismissed

Appeal Details

RSA Number 33624514 RSA 2009
Assessee PAN AAATR1097C
Bench Pune
Appeal Number ITA 336/PUN/2009
Duration Of Justice 1 year(s) 7 month(s) 13 day(s)
Appellant ITO, Pune
Respondent Rajasthani & Gujrati Charitable foundation, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-10-2010
Assessment Year 2004-2005
Appeal Filed On 16-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NO. 336 & 337/PN/09 (ASST. YEAR 2004-05 & 2005- 06) ITO WARD 6(2) PUNE .... APPELLANT VS. RAJASTHANI & GUJRATI CHARITABLE FOUNDATION POONA HOSPITAL & RESEARCH CENTRE 27 SADASHIV PETH PUNE-30 PAN NO. AAATR1097C . RESPONDENT APPELLANT BY : SMT. MANJU AJWANI RESPONDENT BY : NONE ORDER PER D. KARUNAKARA RAO AM THESE ARE THE APPEALS BY THE REVENUE AGAINST THE ORD ER OF THE CIT(A)-II PUNE IDENTICALLY DATED 30/12/2008 FOR A.Y 2004-05 A ND 2005-06. GROUNDS ARE NARRATIVE AND THE CORE ISSUE THAT ARISES FROM THE GROUNDS REVOLVES AROUND THE ISSUE OF ALLOWABILITY OF DEPRECIATION ON ASSETS WHI CH ARE PURCHASED OUT OF THE EXEMPT FUNDS OF THE TRUST. 2. AT THE VERY OUTSET LD. COUNSEL TOOK US THROUGH GROU ND NO. 4 TO 6 OF THE IMPUGNED ORDER FOR THE FACTS OF THE CASE AND ALSO THE ASSESSEES CONTENTIONS BEFORE THE AUTHORITIES OF REVENUE. FURTHER RELYING ON PA RA 4 TO 6 LD. COUNSEL TRACED THE DECISION OF THE CIT(A) IN HIS FAVOUR RELYI NG ON THE JURISDICTIONAL HIGH COURT JUDGEMENT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION 264 ITR 110(BOM). ON THE OTHER HAND LD. DR RELIED ON THE ARG UMENTS REFERRED IN THE GROUNDS AND THE ORDER OF THE A.O. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEV ANT PARA 4 TO 6 OF THE IMPUGNED ORDER WHICH ARE REPRODUCED AS UNDER:- 4. IN THE ASSESSMENT PROCEEDINGS IT WAS STATED BY THE ASSESSING OFFICER THAT ON VERIFICATION OF THE CONSOLIDATED IN COME & EXPENDITURE ACCOUNT IT APPEARED THAT THE DEPRECIATION OF RS. 2 6 26 211/- HAD BEEN ITA NO. 336 & 337/PN/09 A.Y: 2004-05 & 2005-06 PAGE 2 OF 3 DEBITED ON ACCOUNT OF THREE BUILDINGS. THE CONSTRUC TION COST OF THE BUILDINGS WAS MET FROM THE CORPUS FUND AND EARMARKE D FUNDS WHICH ARE CONSIDERED EXEMPT FROM APPLICATION OF SECTION 11(2) OF THE ACT IN THE YEAR OF RECEIPT. THE ASSESSING OFFICER THEREFORE CONTE NDED THAT THE CLAIM OF DEPRECIATION ON THE ASSETS ACQUIRED FROM THE EXEMPT ED FUNDS AMOUNTED TO DOUBLE BENEFIT OF DEDUCTION. THEREFORE THE AMOU NT OF DEPRECIATION OF RS. 26 26 211/- IS NOT CONSIDERED AS AN APPLICATION OF INCOME AND WAS THEREFORE DISALLOWED. 5. IN THE APPELLATE PROCEEDINGS IT WAS SUBMITTED BY THE APPELLANT THAT THEY HAD QUOTED THE JUDGEMENT OF THE HON. BOMBAY HI GH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION REPORTED IN 264 ITR 110. THE APPELLANT ALSO POINTED OUT THAT IN A SIMILAR APPEAL FOR THE YEAR 2004-05 FILED FOR ANOTHER TRUST THE THEN CIT(A)-II PUNE HAD DECIDED THE CASE IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE ABOVE IT WAS CONTENDED THAT THE CASE SHOULD BE DISPOSED OFF ACCO RDINGLY. 6. I HAVE GONE THROUGH THE FACTS OF THIS ISSUE. TH E DECISION OF THE BOMBAY HIGH COURT (SUPRA) IS CLEARLY APPLICABLE AS IT WAS HELD THAT DEPRECIATION IS STILL ALLOWABLE ON THE ASSETS COST OF WHICH WAS FULLY ALLOWED AS APPLICATION OF INCOME IN THE PAST YEARS. THE HONBLE HIGH COURT IN THE SAID DECISION HA RELIED U PON THE DECISION IN THE CASE OF DIT(EXEMPTION) VS. FRAMJEE CAWASJEE INSTITU TE REPORTED IN 109 CTR (BOM.) 463 AND FURTHER DECISION OF THE BOMBAY H IGH COURT IN THE CASE OF CIT VS. MUNISUVRAT JAIN (1994) TAX LR 1084. RELYING UPON THESE DECISIONS THE ASSESSING OFFICER IS DIRECTED TO ALL OW THE DEPRECIATION. THIS GROUND OF APPEAL IS ALLOWED. 4. FROM THE ABOVE AND ALSO FROM THE RECORDS AVAILAB LE IT IS EVIDENT THAT THE IMPUGNED ASSETS IS A BUILDING WHICH WAS C ONSTRUCTED OUT OF EXEMPTED FUNDS OF THE TRUST I.E. (CORPUS FUNDS AND EARMARKED FUNDS). IN THESE FACTUAL CIRCUMSTANCES THE APPLICABILITY OF T HE ABOVE IMPUGNED JURISDICTIONAL HIGH COURT JUDGMENT TO THE INSTANT C ASE IS DIRECT AND TO THE ISSUE UNDER CONSIDERATION. WE HAVE ALSO PERUSED THE RATIO OF THE ABOVE REFERRED JUDGEMENT AND RELEVANT EXTRACTS FROM THE H ELD PORTION OF THE JUDGMENT READS AS UNDER. I) THAT THE TRIBUNAL WAS RIGHT IN LAW IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON THE ASSE TS THE COST OF WHICH HAD BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTION 11 IN THE PAST YEARS. . 5. IN THE LIGHT OF THE ABOVE WHICH IS BINDING ON T HE PUNE BENCHES OF THE TRIBUNAL WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY THE GROUNDS OF BOTH THE APPEALS ARE DISMISSED . ITA NO. 336 & 337/PN/09 A.Y: 2004-05 & 2005-06 PAGE 3 OF 3 6. IN THE RESULT THE APPEAL OF THE REVENUE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2010. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 28 TH OCTOBER 2010 R COPY OF THE ORDER IS FORWARDED TO : 1. ITO WARD 6(2) PUNE 2. ASSESSEE 3. CIT(A)-II PUNE 4. CIT-III PUNE 5. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE