Shri Satya Sai Trust m.p. Bhopal, v. The ACIT 1 9(2),

ITA 5/IND/2009 | 2004-2005
Pronouncement Date: 23-04-2010 | Result: Allowed

Appeal Details

RSA Number 522714 RSA 2009
Assessee PAN AAATS3999N
Bench Indore
Appeal Number ITA 5/IND/2009
Duration Of Justice 1 year(s) 3 month(s) 3 day(s)
Appellant Shri Satya Sai Trust m.p. Bhopal,
Respondent The ACIT 1 9(2),
Appeal Type Income Tax Appeal
Pronouncement Date 23-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 23-04-2010
Date Of Final Hearing 21-04-2010
Next Hearing Date 21-04-2010
Assessment Year 2004-2005
Appeal Filed On 19-01-2009
Judgment Text
PAGE 1 OF 5 - IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AAATS3999N I.T.A.NO.05/IND/2009 A.Y. : 2004-05 SRI SATYA SAI TRUST ACIT M.P.BHOPAL VS BHOPAL C/O PERMALI WALLACE PVT.LTD. HOSHANGABAD ROAD BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI AJAY CHHAJED ADV. RESPONDENT BY : SMT.APARNA KARAN SR.DR DATE OF HEARING : 21.04.2010 O R D E R PER BENCH THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT(A)-I BHOPAL DATED 17.11.2008 FOR THE ASSESSM ENT YEAR 2004-05. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. GROUND NO.1 IS OF GENERAL NATURE HENCE NO DECISIO N IS REQUIRED THEREON. PAGE 2 OF 5 - 4. IN GROUND NOS. 2 & 3 THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN REJECTING ITS CLAIM OF DEPRECI ATION OF RS. 48 17 856/-. 5. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A SO CIETY REGISTERED U/S 12-A AND ENTITLED FOR EXEMPTION U/S 11. THE ASS ESSEE COMPANY CLAIMED DEPRECIATION ON ASSETS WHICH THE A.O. DISA LLOWED FOR THE REASON THAT THE SAME COULD NOT BE CONSIDERED AS APPLICATIO N OF INCOME. THE A.O. ALSO HELD THAT SINCE THE FIXED ASSETS WERE ACQUIRED OUT OF APPLICATION OF INCOME WHEREON THE ASSESSEE HAD CLAIMED EXEMPTION U/S 11 HENCE THE DEPRECIATION ON THE SAME WOULD AMOUNT TO DOUBLE DED UCTION. THE A.O. RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED VS. UNION OF INDIA AS REPORTED IN 199 ITR 4 3 FOR THIS VIEW. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A) WHO ALSO CONFIRMED THE ACTION OF THE A. O. THE LD. CIT(A) ALSO HELD THAT THE DECISIONS OF THE TRIBUNAL AND VA RIOUS HON'BLE HIGH COURTS RELIED ON BY THE ASSESSEE WERE NOT TO BE CON SIDERED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F ESCORTS LIMITED (SUPRA). AGGRIEVED BY THIS THE ASSESSEE IS IN APPE AL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED THE FACTS AND SUBMITTED THAT THE ISSUE WAS COVERED IN FAVOUR OF T HE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF M.P. MADHYA M IN I.T.A.NO. 712/IND/2007 AND IN THE CASE OF ACIT VS. SOCIETY OF PILLAR IN I.T.A.NO. PAGE 3 OF 5 - 59/IND/2008 ORDER DATED 18 TH JULY 2008. HE ALSO REFERRED TO THE DIFFERENT ORDERS OF THE TRIBUNAL IN THE CASE OF NATIONAL CENT RE FOR HUMAN SETTLEMENT AND ENFORCEMENT VS. ACIT IN I.T.A.NO. 1 63/IND/2009 AND BHOPAL SCHOOL OF SOCIAL SCIENCES VS. ACIT IN I.T.A. NO. 164/IND/2009 ORDER DATED 19 TH JUNE 2009 WHEREIN THE TRIBUNAL AFTER CONSIDERING THE AFORESAID DECISION OF THE HON'BLE SUPREME COURT AND VARIOUS OTHER JUDICIAL DECISIONS HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LEARNED COUNSEL DREW OUR ATTENTION TO RELEVANT PARA S OF THE SAID ORDERS OF THE TRIBUNAL. 7. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTR OVERT THIS CLAIM OF THE ASSESSEE. HOWEVER SHE PREFERRED TO RE LY ON THE ORDER OF THE LD. CIT(A). 8. WE FIND THAT THE TRIBUNAL IN THE AFORESAID DECISION S RELIED ON BY THE ASSESSEE AS AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED (SUPRA) HAS H ELD THAT THE ASSESSEE WAS ELIGIBLE FOR ALLOWANCE OF CLAIM OF DEPRECIATION SO AS TO COMPUTE PROPER INCOME OF THE CHARITABLE TRUST. HENCE RESPE CTFULLY FOLLOWING THE SAME WE ALLOW BOTH THESE GROUNDS OF THE ASSESSEE. 9. IN GROUND NO.4 THE ASSESSEE IS AGGRIEVED BY THE D ECISION OF THE LD. CIT(A) IN REJECTING ITS CLAIM OF EXPENDITURE OF RS. 67 566/- IN THE PAGE 4 OF 5 - FORM OF WRITE OFF OF TDS. IN THIS REGARD WE REPROD UCE RELEVANT FINDINGS OF THE LD. CIT(A) AS UNDER :- NOW COMING TO THE ISSUE OF DISALLOWANCE OF THE AMO UNT OF TAX DEDUCTED AT SOURCE RS. 67 566/- BY THE BANK ON THE INTEREST AMOUNT PAID ON F.D WHICH WAS DEBITED AND WRITTEN OFF AS I NCOME TAX ( TDS) THROUGH INCOME AND EXPENDITURE ACCOUNT AND WAS CLAIMED AS APPLICATION OF INCOME OF THE CHARITABLE TRUST. I T IS SUBMITTED THAT WHEN THE AMOUNT OF REFUND WAS RECEIVED BY THE APPELLANT ON 15 TH JULY 2005 WITH THE AMOUNT OF INTEREST THIS TOTAL AMOUNT OF RS. 71 082/- WAS SHOWN BY WAY OF OTHER INCOME IN THE AC COUNT FOR THE YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR 2006-0 7. COPY OF THE CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 ST MARCH 2004 AND 31 ST MARCH 2006 REFLECTING THE ENTRIES IN RESPECT OF INCOME TAX WRITTEN OFF AS WELL AS OTHER INCOME HAS BEEN FILED. IT IS ARGUED THAT THUS THE APPELLANTS CLAIM OF TDS AMOUNT DURING THE YEAR UNDER APPEAL BY WAY OF DEDUCTION IS PROPER AND HAS TO BE ALLOWED BY WAY OF DEDUCTION. 10. BOTH THE PARTIES HAVE REITERATED THEIR RESPECTIVE S TAND. IN OUR VIEW IN THE YEAR UNDER CONSIDERATION THE IMPUGNED DISALLOWANCE RESULTS INTO TAXATION OF GROSS INTEREST INCOME. FURTHER IN SUBSEQUENT YEAR WHEN THE REFUND OF TDS HAS BEEN CREDITED IN THE RESPECTI VE ACCOUNT AND HAS PAGE 5 OF 5 - BEEN OFFERED TO TAX. THIS RESULTS INTO A SITUATION WHERE ACTUAL INCOME OF RS.100/- HAS BEEN TAXED AT RS. 110/-. HENCE IN OUR VIEW IN THE YEAR UNDER CONSIDERATION THE ASSESSEE SHOULD HAVE BEEN ALLOWED THE CLAIM OF ITS WRITE OFF TDS OR THE LD. CIT(A) SHOULD HAVE GIV EN DIRECTION TO EXCLUDE THE SAME FROM THE INCOME FROM SUBSEQUENT YE AR. NOW THE POSITION IS THAT THE SAME AMOUNT HAS BEEN OFFERED A S INCOME IN THE SUBSEQUENT EARLIER YEAR. HENCE SUCH WRITE OFF IN OUR VIEW SHOULD BE ALLOWED AS EXPENDITURE IN THE YEAR UNDER CONSIDERAT ION . WE MAY ALSO ADD THAT IN THE NORMAL CIRCUMSTANCES IT MAY NOT BE SO BECAUSE DEFERMENT OF INCOME IS NOT PERMISSIBLE. HOWEVER IN THE PRESENT CASE THERE IS NO TAX EFFECT AS INCOME IS EXEMPT. THEREFORE THE INTEREST OF REVENUE ARE NOT PREJUDICED IN ANY WAY. IN THIS VIEW OF THE MATTER WE ALLOW THIS GROUND OF THE ASSESSEE ALSO. 11. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 23 RD APRIL 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD APRIL 2010. CPU* 21224