DCIT, Hisar v. Maharaja Agarsain Medical Education & Scientific Research Society, Agroha

ITA 5037/DEL/2010 | 2007-2008
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 503720114 RSA 2010
Assessee PAN AAATM1458N
Bench Delhi
Appeal Number ITA 5037/DEL/2010
Duration Of Justice 2 month(s) 4 day(s)
Appellant DCIT, Hisar
Respondent Maharaja Agarsain Medical Education & Scientific Research Society, Agroha
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 21-01-2011
Date Of Final Hearing 19-01-2011
Next Hearing Date 19-01-2011
Assessment Year 2007-2008
Appeal Filed On 16-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E: NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO. 5037/DEL/2010 ASSESSMENT YEAR: 2007-08 DCIT VS. MAHARAJA AGARSAIN MEDICAL HISAR. EDUCATION & SCIENTIFIC RESEARCH SOCIETY AGROHA AAATM1458N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PEEYUSH SONKAR SR. DR RESPONDENT BY : SHRI K. SAMPATH ADV. ORDER PER I.P. BANSAL J.M. THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER PASSED BY CIT(A) DATED 7 TH SEPTEMBER 2010 FOR A.Y. 2007-08. GROUNDS OF APPEAL READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN ALLOWING DEPRECIATION AMOUNTING TO RS. 2 2 4 45 530/- ON FIXED ASSET IN THE CASE OF CHARITABLE TRUST/INSTITU TION PARTICULARLY WHEN THE INCOME IS COMPUTED AS PER PROVISIONS OF SECTION S 11 TO 13 OF THE INCOME TAX ACT 1961 AND QUESTION OF DEPRECIATION D OES NOT ARISE WHEN CAPITAL EXPENDITURE IS ALSO CONSIDERED AS APPL ICATION OF INCOME ITA NO. 5037/D/10 2 OF THE ASSESSEE AND THERE REMAINS NO ASSETS/WDV FOR CLAIM OF DEPRECIATION? 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN ALLOWING DOUBLE DEDUCTION ON DEPRECIATION WHEN CAPITAL EXPENDITURE ON THE ASSET HAS ALREADY BEEN ALLOWED IN THE LIGHT OF THE APEX COURTS DECISION IN ESCORTS LIMITED VS. UOI (1 99-ITR-43) TO THE EFFECT THAT IN THE ABSENCE OF CLEAR STATUTORY INDIC ATION TO THE CONTRARY THE STATUTE SHOULD NOT BE READ AS TO PERMIT AN ASSE SSEE TWO DEDUCTIONS ON SAME EXPENDITURE. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE G ROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 2. THE ASSESSEE IS A CHARITABLE INSTITUTION AND ENJ OYING THE BENEFIT OF REGISTRATION U/S 12AA OF INCOME TAX ACT 1961. WHI LE CALCULATING THE APPLICATION OF INCOME LD. AO HAS REDUCED AN AMOUN T OF RS. 2 24 45 530/- BEING DEPRECIATION. ACCORDING TO AO THE SAID DEPRE CIATION CANNOT BE TREATED AS APPLICATION OF INCOME FOR CHARITABLE P URPOSE AS 100% OF THE INVESTMENTS MADE IN ACQUISITION OF ASSETS HAD ALREA DY BEEN CLAIMED AND ALLOWED AS APPLICATION OF INCOME U/S 11 OF THE A CT. THOUGH THE SAID SUM HAS BEEN EXCLUDED BUT STILL THE APPLICATION OF INC OME HAS BEEN COMPUTED AT RS.12 05 73 910/- AS AGAINST GROSS RECEIPTS OF R S. 9 57 19 717/-. THE AO HAS COMPUTED ELIGIBLE APPLICATION OF INCOME BY REDUCING 15% OF THE GROSS RECEIPT AT RS. 8 13 61 759/-. THUS THE APP LICATION OF INCOME WHICH HAS BEEN COMPUTED BY AO AT RS. 12 05 73 910/- STILL EXCEEDS THE SUM OF RS. 8 13 61 759/- AND THUS IT DOES NOT AFFECT THE ASSESSABLE INCOME OF THE ASSESSEE WHICH AS PER RETURN IS DECLARED LOSS OF RS . 77 35 824/-. THE ITA NO. 5037/D/10 3 ASSESSEE AGITATED THE EXCLUSION OF RS. 2 24 45 530/ - BEING DEPRECIATION BEFORE THE AO FOR THE PURPOSE OF APPLICATION OF IN COME. LD. CIT(A) HAS GRANTED THE RELIEF TO THE ASSESSEE FOLLOWING THE DE CISION OF ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004-05 AN D 2005-06. THE DEPARTMENT IS AGGRIEVED HENCE IN APPEAL. 3. LD. DR RELYING UPON THE ORDER OF AO PLEADED THAT THE SAID AMOUNT COULD NOT BE CONSIDERED TO BE APPLICATION OF INCOM E AS ASSESSEE HAD ALREADY CLAIMED THE SAID AMOUNT IN ITS ENTIRETY AS APPLICATION OF INCOME U/S 11 OF THE ACT. 4. ON THE OTHER HAND RELYING UPON THE ORDER OF CIT (A) IT WAS PLEADED THAT THE VIEW POINT TAKEN BY ITAT IN ASSESSEES OWN CASE IN EARLIER YEARS HAS RIGHTLY BEEN ACCEPTED BY LD. CIT(A) AND THEREF ORE HIS ORDER SHOULD BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT IS SEEN THAT NOW THI S ISSUE IS NO MORE RES- INTEGRA AS JURISDICTION HIGH COURT IN THE FOLLOWING CASES HAS UPHELD THE VIEW POINT TAKEN BY TRIBUNAL AND FOLLOWED BY CIT(A) IN T HE CASE OF ASSESSEE FOR A.Y. 2004-05 & 2005-06: - (I) CIT VS. MARKET COMMITTEE PIPLI 330 ITR 16 WHE REIN IT HAS BEEN HELD THAT THE INCOME OF THE ASSESSEE BEING EXEMPT THE A SSESSEE WAS ONLY ITA NO. 5037/D/10 4 CLAIMING THAT DEPRECIATION SHOULD BE REDUCED FROM T HE INCOME FOR DETERMINING THE PERCENTAGE OF FUNDS WHICH HAD TO BE APPLIED FOR THE PURPOSES OF THE TRUST. THERE WAS NO DOUBLE DEDUCTI ON CLAIMED BY THE ASSESSEE. IT COULD NOT BE HELD THAT DOUBLE BENEFIT WAS GIVEN IN ALLOWING THE CLAIM FOR DEPRECIATION FOR COMPUTING INCOME FOR THE PURPOSE OF SEC. 11. WHILE HOLDING SO THEIR LORDSHIPS HAVE ALSO CONSIDER ED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ESCORT LIMITED VS. UNION OF INDIA 199 ITR 43 (SC) WHICH HAS BEEN DISTINGUISHED. (II) CIT VS. TINY TOTS EDUCATION SOCIETY 330 ITR 2 1 THE SIMILAR PROPOSITION WAS ALSO LAID DOWN BY THE HONBLE HIGH COURT. 6. IN THIS VIEW OF THE SITUATION WE FIND NO INFIRM ITY IN THE ORDER OF CIT(A) VIDE WHICH THE ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE. WE DECLINE TO INTERFERE HENCE DEPARTMENTAL APPEAL IS DISMISSE D. 7. IN THE RESULT DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.1.11 (A.K. GARODIA) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER * KAVITA DATED: ITA NO. 5037/D/10 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT