Income Tax Appellate Tribunal - Ahmedabad
Asst. Commissioner Of Income Tax ... vs Blind People'S Association India,, ... on 2 April, 2018
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ 'ए', अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL " A " BENCH, AHMEDABAD सव ी राजपाल यादव, या यक सद य एवं द प कुमार के डया, लेखा सद य के सम । BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No.2376/Ahd/2016 ( नधा रण वष / Assessment Year : 2013-14) The Asst.CIT बनाम/ Blind Peoples Association (Exemptions) Vs. India Circle-1, Opp: IIM, Vastrapur Ahmedabad Ahmedabad थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAAAB 0440 L (अपीलाथ% /Appellant) .. ( &यथ% / Respondent) अपीलाथ% ओर से / Appellant by : Shri Rajdeep Singh, Sr.DR &यथ% क( ओर से/Respondent by : Shri Parin Shah, AR ु वाई क( तार ख / सन Date of Hearing 02/04/2018 घोषणा क( तार ख /Date of Pronounce ment 02/04/2018 आदे श / O R D E R PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the Revenue seeking to assail the appellate order of the Commissioner of Income Tax(Appeals)-9, Ahmedabad [CIT(E) in short] dated 11/07/2016 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 28/09/2015 relevant to Assessment Year (AY) 2012-13.ITA No.2376/Ahd/2016
ACIT (E) vs. Blind Peoples Association India Asst.Year - 2013-14 -2-
2. The Revenue has challenged the action of the CIT(A) in deleting the disallowance of depreciation of depreciation on capital assets amounting to Rs.62,37,844/- made by the Assessing Officer (AO).
3. The short issue in the instant case is whether depreciation is allowable on the expenditure incurred for capital purposes where such expenditure has been treated as application of income for the object of the trust in terms of section 11(1)(a) of the Act.
4. The aforesaid issue is squarely covered in favour of assessee in its own case in ITA No.2657/Ahd/2012 relevant to AY 2009-10 order dated 24/01/2013. The identical issue was also cropped up before the Coordinate Bench of Tribunal in DCIT (E) vs. N.H. Kapadia Education Trust in I.T.A. No.3090/Ahd/2015 order dated 08/01/2018. In terms of the recent judgement of the Hon'ble Supreme Court in the case of CIT vs. Rajsthan and Gujarati Charitable Foundation Pune in Civil Appeal No.7186 of 2014 delivered on 13/12/2017, the Coordinate Bench adjudicated the issue in favour of assessee. The relevant operative para of the order of the Coordinate Bench in the case of N.H.Kapadia Education Trust (supra) is reproduced hereunder for ready reference:-
"8. We have carefully considered the rival submission. The core controversy in the case in hand is whether depreciation is allowable on the expenditure incurred for capital purposes where such expenditure has been treated as application of income for the object of the trust in terms of section ITA No.2376/Ahd/2016 ACIT (E) vs. Blind Peoples Association India Asst.Year - 2013-14 -3- 11(1)(a) of the Act. It is the case of the Revenue that once the capital expenditure has been claimed as deduction under s.11(1)(a) as application of income for the object of the trust, the depreciation claimed on the same assets amount to double deduction which is not permissible in law having regard to the provisions of section 11(6) of the Act which prohibits such double deduction. The assessee, on the other hand, contends that there is no bar in making claim of depreciation allowances as per commercial principles for the assessment year 2008-09 in question since section 11 (6) of the Act has been inserted prospectively and operates from AY 2015-16 onwards. It is thus the case of the assessee that the cost incurred towards capital assets is eligible for depreciation allowance notwithstanding parallel exemption exploited under s.11(1)(a) of the Act.
9. We find that the issue is set to rest and is no longer res integra. The Hon'ble Supreme Court in the case of CIT vs. Rajasthan Gujarati Charitable Foundation Poona in Civil Appeal No.7186 of 2014 judgement dated 13/12/2017 held that even if the entire expenditure incurred for acquisition for a capital asset is treated as application of income for charitable purposes under s.11(1)(a) of the Act, the assessee continues to be entitled to depreciation under s.32 of the Act. The Hon'ble Supreme Court observed that the argument that the grant of depreciation amounts to giving double benefit to the assessee is not acceptable. The Hon'ble Supreme Court further held that specific provision of section 11(6) which bars claim of depreciation on expenditure applied for charity purposes is prospective and applies only from AY 2015-16. In view of the decision of the Hon'ble Supreme Court, the assessee is entitled to depreciation allowance notwithstanding the fact that the entire expenditure incurred for acquisition of capital was admitted as application of income for charitable purposes under s.11(1)(a) of the Act."
4. Thus, the issue is now well settled. In parity, the CIT(A) has rightly granted relief to the assessee towards depreciation on capital expenditure as claimed. Thus, we decline to interfere.
ITA No.2376/Ahd/2016ACIT (E) vs. Blind Peoples Association India Asst.Year - 2013-14 -4-
5. In the result, Revenue's appeal is dismissed.
This Order pronounced in Open Court on 02/04/2018
Sd/- Sd/-
(राजपाल यादव) ( द प कुमार के डया)
या यक सद य लेखा सद य
(RAJPAL YADAV) ( PRADIP KUMAR KEDIA )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 02/ 04 /2018
ट .सी.नायर, व. न.स./T.C. NAIR, Sr. PS
आदे श क ! त#ल$प अ%े$षत/Copy of the Order forwarded to :
1. अपीलाथ% / The Appellant
2. &यथ% / The Respondent.
3. संबं5धत आयकर आयु7त / Concerned CIT
4. आयकर आयु7त(अपील) / The CIT(A)-9, Ahmedabad
5. 8वभागीय त न5ध, आयकर अपील य अ5धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, स&या8पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation .. 02.04.18 (dictation-pad 8- pages attached at the end of this appeal-file)
2. Date on which the typed draft is placed before the Dictating Member ... 02.04.18
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......2.4.18
7. Date on which the file goes to the Bench Clerk.....................2.4.18
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................