ITO (EXEMPTION)-2(3) MUMBAI, MUMBAI v. SAYAJI-U-BA KHIN MEMORIAL TRUST, MUMBAI

ITA 5884/MUM/2016 | 2011-2012
Pronouncement Date: 30-11-2017 | Result: Dismissed

Appeal Details

RSA Number 588419914 RSA 2016
Assessee PAN AAATT0114E
Bench Mumbai
Appeal Number ITA 5884/MUM/2016
Duration Of Justice 1 year(s) 1 month(s) 26 day(s)
Appellant ITO (EXEMPTION)-2(3) MUMBAI, MUMBAI
Respondent SAYAJI-U-BA KHIN MEMORIAL TRUST, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 30-11-2017
Assessment Year 2011-2012
Appeal Filed On 04-10-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 5884/MUM/2016 : A.Y : 2011 - 12 ITO (EXEMPTION) - 2(3) MUMBAI (APPELLANT) VS. SAYAJI - U - BA KHIN MEMORIAL TRUST 2 ND FLOOR GREEN HOUSE GREEN STREET FORT MUMBAI 400 023 PAN : AAATT0114E (RESPONDENT) APPELLANT BY : SHRI SUMAN KUMAR RESPONDENT BY : SHRI RAJNIKANT V. CHANIYARI DATE OF HEARING : 07/11/2017 DATE OF PRONOUNCEMENT : 30 /11/2017 O R D E R PER G.S. PANNU AM : THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) MUMBAI - 1 DATED 19.07.2016 PERTAINING TO THE ASSESSMENT YEAR 2011 - 12 WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER MUMBAI DATED 24.02.2014 U/S 143(3) OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). 2. IN ITS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 2 SAYAJI - U - BA KHIN MEMORIAL TRUST ITA NO. 5884/MUM/2016 1. WHETHER ON THE FACTS OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON ACCOUNT OF DISALLOWING DEPRECIATION ON FIXED ASSETS OF RS.80 55 519/ - IN CONTRAVENTION OF THE DECISION OF ESCORTS LTD. VS. UOI 199 ITR 43 WHEREIN IT WAS HELD THAT SINCE SECTION 11 OF THE INCOME TAX ACT PROVIDES FOR DEDUCTION CAPITAL EXPENDITURE INCURRED ON ASSETS ACQUIRED FOR THE OBJECTS OF THE TRUST AS APPLICATION AND DOES NOT SPECIFICALLY & EXPRESSLY PROVIDE FOR DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION ON THE SAME VERY ASSETS ACQUIRED FROM SUCH CAPITAL EXPENDITURE NO DED UCTION SHALL BE ALLOWED U/S.32 FOR THE SAME OR ANY OTHER PREVIOUS YEAR IN RESPECT OF THAT ASSET AS IT AMOUNTS TO CLAIMING A DOUBLE DEDUCTION. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN ALLOWING THE APPE AL WHEN THE DELHI HIGH COURT IN THE CASE OF CHARANJIV CHARITABLE TRUST AND KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS CIT 76 DTK (KER) 372 HAS DECIDED THE ISSUE IN THE FAVOUR OF THE DEPARTMENT AFTER CONSIDERING THE DECISION OF HON'BL E SUPREME COURT IN THE CASE OF ESCORTS LTD (199 ITR 43). 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN RELYING UPON THE JUDGMENT OF HON'BLE HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION WITHOUT APPRECIATING THE FACT THAT DEPARTMENT HAS NOT ACCEPTED THE DECISION ON MERIT BUT DUE TO SMALLNESS OF TAX EFFECT APPEAL WAS NOT FILED BEFORE HON'BLE SUPREME COURT. HOWEVER THE ISSUE IS PENDING FOR ADJUDICATION BEFORE HON'BLE SUPREME COUR T IN OTHER CASES. 4. WHETHER ON THE FACTS OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN ALLOWING THE ACCUMULATION OR SETTING APART OF 15% OF INCOME OF RS.63 71 846/ - AS THE ASSESSEE HAS EXPENDED THE ENTIRE INCOME TOWARD OBJECT OF THE TRUST AS APPLICATION OF INCOME AND THERE IS NO SURPLUS LEFT TO BE ACCUMULATED. HOWEVER IN ASSESSEE'S OWN CASE THE QUESTION OF LAW ON THIS ISSUE HAS BEEN ADMITTED BY HON'BLE BOMBAY HIGH COURT VIDE ORDER ITA NO. 2422 OF 2013 DATED 26TH APRIL 2016 FOR A.Y. 2007 - 08. 5. WHETHER ON THE FACTS OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT OF RS.1 58 37 846/ - AND ALLOWING SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS. 3 SAYAJI - U - BA KHIN MEMORIAL TRUST ITA NO. 5884/MUM/2016 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LA W THE LD CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT IGNORING THE FACT THAT THERE WAS NO EXPRESS PROVISION IN THE I T ACT 1961 PERMITTING ALLOWANCE OF SUCH CLAIM. 7. WHETHER ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT BY RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION IGNORING THE FA CT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT ON MERIT OF THE CASE BUT DUE TO SMALLNESS OF TAX EFFECT APPEAL WAS NOT FILED BEFORE HON'BLE SUPREME COURT. HOWEVER ON THIS ISSUE THE DEPARTMENT HAS FILED SLP BEFO RE THE APEX COURT IN THE CASE OF MIDC (SPL (CIVIL) 9891 OF 2014) AND THE MATTER IS PENDING BEFORE THE HON'BLE SUPREME COURT. 8. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - I MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED.' 3. ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE DISPUTE INVOLVED IN THIS APPEAL IS ON THREE ISSUES. FIRSTLY THE REVENUE IS AGGRIEVED BY THE DECISION OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE BENEFIT OF DEPRECIATION. SECONDLY THE GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE CIT(A) IN ALLOWING THE ASSESSEE THE BENEFIT OF CARRY FORWARD OF THE DEFICIT FOR FUTURE SET - OFF. LASTLY THE REVENUE IS AGGRIEVED BY THE DECISION OF CIT(A) IN ALLOWING THE ACCUMULATION OR SETTING APART OF 15% OF INCOME AS APPLICATION OF INCOME. 4. AT THE TIME OF HEARING IT WAS POINTED OUT TO THE LD. DR THAT ON ALL THE THREE ISSUES THE CIT(A) HAS FOLLOWED THE DECISION OF HIS PREDECESSOR 4 SAYAJI - U - BA KHIN MEMORIAL TRUST ITA NO. 5884/MUM/2016 IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 WHICH HAD BEEN APPROVED BY THE TRIBUNAL VIDE ORDER S IN ITA NO. 5646/MUM/2011 DATED 17.5.2013 AND ITA NO. 138/MUM/2013 DATED 20.3.2014. 5. IN THIS BACKGROUND NOW WE MAY REFER TO THE RELEVANT FACTS. THE RESPONDENT - ASSESSEE IS A CHARITABLE ORGANISATION REGISTERED U/S 12A OF THE ACT AND IS ENGAGED IN CHARITABLE ACTIVITIES TO PERPETUATE THE MEMORY OF LATE SHRI SAYAJI U BA KHIN AND FOR THAT PURP OSE TO ESTABLISH SCHOOL LIBRARY ASHRAMS OR ANY OTHER INSTITUTION AND TO PUBLISH BOOKS PAMPHLETS AND OTHER LITERATURE ABOUT HIS VIEW LIFE AND THE TECHNIQUE OF VIPSASHYANA . THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD CLAIMED DEPRECIATION ALLOWANCE OF RS. 80 55 519 / - ON THE COST OF FIXED ASSETS WHEREAS SUCH COST OF FIXED ASSETS HAS ALSO BEEN TAKEN AS AN APPLICATION OF INCOME WHILE COMPUTING THE TOTAL INCOME. ACCORDING TO THE ASSESSING OFFICER THIS AMOUNTED TO A DOUBLE DEDUCTION AND HE THEREFORE DISALLOWED THE ASSESSEES CLAIM FOR DEPRECIATION. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION 264 ITR 110 (BOM) AS WELL AS THE DEC ISION OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA) . 6. BEFORE US THE PLEA OF THE DEPARTMENT IS THAT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT ON MERITS AND ON A SIMILAR ISSUE SLP (CIVIL) NO. 9891 OF 2014 HAS BEEN FILED BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF MAHARASHTRA INDUSTRIAL 5 SAYAJI - U - BA KHIN MEMORIAL TRUST ITA NO. 5884/MUM/2016 DEVELOPMENT CORPORATION (MIDC) . FURTHER IT IS CONTESTED THAT ALLOWING OF DEPRECIATION WOULD AMOUNT TO A DOU BLE DEDUCTION WHICH WAS IMPERMISSIBLE HAVING REGARD TO THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. 199 ITR 43 (SC) . 7. WE FIND THAT THE DECISION IN THE CASE OF ESCORTS LTD. (SUPRA) BEING RELIED UPON BY THE REVENUE BEFORE US HAS BEEN CONSIDERED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF INDRAPRASTHA CANCER SOCIETY (2014) 112 DTR 345 DATED 18.11.2014 WHEREIN IT HAS BEEN OPINED THAT THE ALLOWANCE OF DEPRECIATION IN SIMILAR SITUATION WOULD NOT AMOUNT TO A DOUBLE DEDUCTION. FU RTHER THE HON'BLE DELHI HIGH COURT IN THE CASE OF VISHWA JAGRITI MISSION ITA NO. 140/2012 DATED 29.3.2012 ALSO ALLOWED A SIMILAR CLAIM AFTER ANALYSING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. (SUPRA) WHICH IS BEING RELIED UP ON BY THE REVENUE. IT IS ALSO NOTICED THAT THE HON'BLE SUPREME COURT HAS ALSO DISMISSED THE SLP FILED BY THE DEPARTMENT AGAINST THE SAID DECISION OF THE HON'BLE DELHI HIGH COURT VIDE SLP NO. 19321 OF 2013. WE FIND THAT THE HON'BLE BOMBAY HIGH COURT SUBSE QUENT TO THE DECISION IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) CONSIDERED A SIMILAR ARGUMENT OF THE REVENUE IN THE CASE OF M/S. MUMBAI EDUCATION TRUST ITA NO. 11/2014 DATED 3.5.2016 AND ALLOWED THE CLAIM OF THE ASSESSEE. IN FACT T HE GROUNDS OF APPEAL URGED BY THE REVENUE BEFORE THE HON'BLE HIGH COURT WHICH READ AS UNDER : - (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW THE CLAIM OF DEPRECIATION RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 6 SAYAJI - U - BA KHIN MEMORIAL TRUST ITA NO. 5884/MUM/2016 264 ITR 110 (BOM) IGNORING THE RATIO OF HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF ESCORTS LTD. V/S. UNION OF INDIA (199 IT R 43) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDED BY LAW IN ADDITION TO NORMAL DEDUCTION? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW THE TRIBUNAL W AS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW TO CARRY FORWARD OF DEFICIT OF EARLIER YEARS RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) WHILE THE REVENUE D ID NOT FILE SLP AGAINST THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR110 (BOM) DUE TO LOW TAX EFFECT?. STAND ON THE SAME FOOTING AS THE GROUNDS OF APPEAL NOS. 1 TO 3 AND 5 TO 7 THAT ARE BEING CANVASSED BEFORE US IN THE INSTANT CASE. THUS THERE IS NO ERROR ON THE PART OF THE CIT(A) IN FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AND ALLOWING THE STAND OF THE ASSESSEE. THE OTHER ARGUMENT TAKEN B Y THE REVENUE THAT ITS SLP FILED BEFORE THE HON'BLE SUPREME COURT IS PENDING ON A SIMILAR ISSUE IS OF NO CONSEQUENCE INASMUCH AS THE BINDING JUDGMENTS OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF THE ASSESSEE AND INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AS WELL AS IN THE CASE OF M/S. MUMBAI EDUCATION TRUST (SUPRA) CONTINUE TO SUBSIST. MOREOVER THE HON'BLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007 - 08 VIDE ORDER DATED 26.04.2016 IN ITA NO. 2422 OF 2013 APPROVED THE STAND O F THE ASSESSEE. THEREFORE IN THIS BACKGROUND WE FIND NO MERIT IN THE GROUND RAISED BY THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 7 SAYAJI - U - BA KHIN MEMORIAL TRUST ITA NO. 5884/MUM/2016 8. SIMILARLY THE SECOND ISSUE RAISED BY THE REVENUE IN GROUNDS OF APPEAL NOS. 5 TO 7 ARE WITH REGARD TO CARRY FORW ARD OF THE DEFICIT OF RS. 1 58 37 846 / - TO BE SET - OFF AGAINST THE FUTURE INCOME. ON THIS ASPECT ALSO CIT(A) HAS ALLOWED THE CLAIM FOLLOWING THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE (SUPRA) WHEREIN THE TRIBUNAL HAS FOLLOWED THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) ; IN FACT SIMILAR SITUATION HAS BEEN FURTHER AFFIRMED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF M/S. MUMBAI EDUCATION TRUST (SUPRA) AS WELL AS I N THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 (SUPRA) AS NOTED EARLIER BY US . THEREFORE ON THIS ASPECT ALSO WE FIND NO ERROR ON THE PART OF THE CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE WHICH WE HEREBY AFFIRM. 9. T HE THIRD ISSUE RAISED BY THE REVENUE BY WAY OF GROUND OF APPEAL NO. 4 IS WITH REGARD TO ALLOWANCE OF ACCUMULATION OF 15% OF INCOME ALLOWED BY THE CIT(A) IN TERMS OF SEC. 11(1)(A) OF THE ACT. THE STAND OF THE ASSESSING OFFICER WAS THAT ACCUMULATION U/S 11(1)(A) OF THE ACT COULD NO T BE ALLOWED AS THE ENTIRE INCOME WAS ALREADY EXPENDED TOWARDS OBJECTS OF THE TRUST AND THERE WAS NO SURPLUS LEFT TO BE ACCUMULATED AND RATHER THERE WAS A DEFICIT. THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE NOTICING THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2007 - 08 (SUPRA) AND 2008 - 09 (SUPRA) HAD UPHELD THE CLAIM OF THE ASSESSEE. 10. AT THE TIME OF HEARING BEFORE US IT IS NOT DISPUTED BY THE REVENUE THAT THE DECISIONS OF THE TRIBUNAL RELIED UPON BY THE CIT(A) CONTINUE TO HOLD T HE FIELD THOUGH THE HON'BLE HIGH COURT HAS ADMITTED 8 SAYAJI - U - BA KHIN MEMORIAL TRUST ITA NO. 5884/MUM/2016 QUESTION OF LAW ON THIS ISSUE FOR THE SAID ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 VIDE ORDERS DATED 26.04.2016 (SUPRA) AND 02.08.2017 IN ITA NO. 06 OF 2015 RESPECTIVELY. IN THE ABOVE BACKGROUND WE HEREBY UPHOLD THE ORDER OF THE CIT(A) ON THIS ASPECT ALSO AND ACCORDINGLY REVENUE FAILS ON THIS GROUND OF APPEAL ALSO. 1 1 . IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 T H NOVEMBER 2017 SD/ - SD/ - ( PAWAN SINGH ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI DATE : 3 0 T H NOVEMBER 201 7 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R B BENCH MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T MUMBAI