Income Tax Appellate Tribunal - Ahmedabad
The Dy. Commissioner Of Income Tax ... vs Dawat Properties Trust,, Ahmedabad on 4 April, 2018
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ - अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "A" BENCH AHMEDABAD
BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER
AND
SHRI RAJPAL YADAV, JUDICIAL MEMBER
आयकर अपील सं./ ITA No. 1907/Ahd/2016
नधा रण वष /Asstt. Year: 2012-2013
The Deputy Commissioner of Vs. Dawat Properties Trust,
Income-tax(Exemptions), Cir.- Qutbi Mazar, Syedna
1, Ahmedabad, 2nd Floor, Qutbuddin Shaheed,
Nature View Building, Near Amdupura, Ahmedabad-
H.K. House, Ashram Road, 382345
Ahmedabad
अपीलाथ / (Appellant) तयथ
् / (Respondent)
Assessee by : None
Revenue by : Aprana M. Agarwal, CIT-D.R
सन
ु वाई क तार ख/Date of Hearing : 13/03/2018
घोषणा क तार ख /Date of Pronouncement: 04/04/2018
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
The Revenue is in appeal before the Tribunal against the order of learned Commissioner of Income Tax (Appeals) dated 20.05.2016 passed for assessment year 2012-2013.
ITA No.1907/Ahd/2016A.Y. 2012-13 2
2. The grounds of appeal taken by the Revenue read as under:-
1) Whether on the facts and in the circumstances of the case the Ld. CIT(A) is justified in allowing the assessee's appeal neglecting the finding of Assessing Officer regarding addition of Rs. 19,81,117/- being depreciation.
2) Whether on the facts and in the circumstances of the case the Ld. CIT(A) is justified in allowing the assessee's claim to set off carried forward losses of Rs. 11,84,10,585/- which the A.O. disallowed
3) On the facts and circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals) ought to have upheld the order of the Assessing Officer.
3. With the assistance of Ld. Representative we have gone through carefully. It is pertinent to observe that assessee trust is registered under section 12AA of the Income tax Act vide order No. HQ.III/64/D-74/74/V dated 28.12.1978. It has filed its return of income on 25.09.2012 declaring Nil income. It has claimed exemption of Rs. 29,28,45,074/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee.
4. On verification of the accounts it reveal to the Assessing Officer that assessee has claimed depreciation of Rs. 19,81,117/-. The Assessing Officer was of the opinion that since assessee has claimed exemption under section 11(1)(a) while acquiring the assets. It claimed it as application of trust funds towards charitable objects hence it cannot claim depreciation again on that very amount. It will be doube deduction to the assessee. Accordingly he disallowed a sum of Rs. 19,81,117/-. Similarly the assessee has a deficit which was claimed for carry forward the Assessing Officer as disallowed it.
ITA No.1907/Ahd/2016A.Y. 2012-13 3
5. On appeal Learned First Appellate Authority has allowed both the claims of the assessee by putting reliance upon the decision of Hon'ble Jurisdictional High Court. The discussion made by the CIT(A) is worth to note which read as under:-
5.2 I have carefully considered the rival contention as well as the observation of the A.O. as well as the case laws relied upon by the appellant. The issue of allowably of depreciation in the case of Charitable Trust has been decided by the Hon'ble Gujarat High court in the case of CIT Vs. Sheth Manilal Ranchhoddas Vishram Bhavan Trust 198 ITR 598 (Guj). Head note and the main facts are reproduced below for reference:-
Section 11 of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - Assessment years 1971-72 and 1972-73 -Whether while computing income under section 11(1)(a), depreciation has to be allowed - Held, yes Head notes of the judgement is:
The income of the assessee-trust was mainly from immovable property For the assessment years 1971-72 and 1972-73, the assessee claimed depreciation. The ITO rejected the assessee's claim on the ground that the income from house property was to be calculated according to sections 22 to 27. However, on appeal, the AAC allowed the assessee's claim. On appeal by the revenue, the Tribunal upheld the order of the AAC.
On reference :
In the case of CIT v. Rao Bahadur Calavala Cunnan Chetty Charities [1982] 135 ITR 485, the Madras High Court held that the income from the properties held under trust would have to be arrived at in the normal commercial manner without classification under the various heads set out in section 14. It held that the expression 'income' has to be ITA No.1907/Ahd/2016 A.Y. 2012-13 4 understood in the popular or general sense and not in the sense in which the income is arrived at for the purpose of assessment to tax by application of some artificial provisions either giving or denying deduction. It observed that the computation under the different categories or heads arises only for the purpose of ascertaining the total income for the purposes of charge. Those provisions cannot be introduced to find out what the income derived from the property r\eld under trust to be excluded from the total income is, for the purpose of the exemptions under Chapter III. Following the aforesaid decision in the instant case the Tribunal was justified in holding that having regard to the scheme of the Act, 'income' referred to in section 11 (1)(a) was not to be computed not in accordance with the provisions of the Act but in accordance with the normal rules of the accountancy under which the depreciation has to be allowed while computing such income under section 11(1)(a).
5.3 In view above and respectfully following the judgments by Hon'ble Gujarat High court in the case of Sheth Manilal Ranchhoddas Vishram Bhavan Trust, 198 ITR 598 (Guj.) mentioned above, I am of the view that addition of Rs.19,81,117/- on account of disallowance of depreciation be deleted. Ground No.2, is accordingly allowed. Further, I agree with the contention of the appellant that u/s.11(1)(a) of the Act, the term used is 'income' and not 'total income.' Accordingly, the depreciation will be allowed while computing the income u/s. 11(1)(a) of the Act. Thus, ground of appeal No. 1 is allowed.
6. Ground no.2, is regarding not allowing to set off carried forward losses of Rs. 11,84,10,585/- to the future years. I have perused the order of A.O and submissions made in this regard by the appellant. Relying on the decisions of Hon'ble Gujarat High Court in the case of CIT vs Shri Plot Shwetambar Murtipujak Jain Mandal 211 ITR 293, I find that the appellant should get the benefit of the deficit of earlier years against the future income. Thus, this ground of appeal is allowed.ITA No.1907/Ahd/2016
A.Y. 2012-13 5
6. A perusal of the above order would indicate that Ld. First Appellate Authority has placed reliance on the decision of the Hon'ble Jurisdictional High Court. We do not find any error in the order of Ld. CIT(A) because it is based upon the position of law propounded by the Hon'ble Jurisdictional High Court. Hence this appeal is dismissed.
10. In the result appeal of the Revenue is dismissed.
Order pronounced in the Court on 04th April, 2018.
Sd/- Sd/- (PRAMOD KUMAR) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 04/04/2018
आदे श क 'त(ल)प अ*े)षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. +यथ / The Respondent.
3. संबं धत आयकर आय-
ु त / Concerned CIT
4. आयकर आय-
ु त(अपील) / The CIT(A)
5. )वभागीय 'त'न ध, आयकर अपील य अ धकरण / DR, ITAT,
6. गाड1 फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad