Income Tax Appellate Tribunal - Mumbai
Ito (E) 2(3), Mumbai vs Yashwantrao Chavan Shikshan Prasarak ... on 10 July, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
"E" Bench, Mumbai
Before Shri P K Bansal, Vice President
and Shri Pawan Singh, Judicial Member
ITA No.6569 /Mum/2016
(Assessment Year: 2012-13)
Income Tax Officer-(E)2(3) Shri Yashwantrao Chavan
Room No. 513, Piramal Shikshan Prasarak Mandal
Chambers, Lal Baug, Parel Vs. 92/B, Geeta Building, 2nd Floor
Mumbai 400012 Opp. Sion Bus Depot, Sion (E)
Mumbai 400022
PAN - AAETS2060G
Appellant Respondent
Appellant by: Dr. A.K. Nayak
Respondent by: Ms. Chaitee Londhe
Date of Hearing: 15.06.2017
Date of Pronouncement: 10.07.2017
ORDER
Per P.K. Bansal, Vice President This appeal has been filed by Revenue against the order of the CIT(A)- 1, Mumbai dated 12.08.2016 for A.Y. 2012-13.
2. The grounds raised by the Revenue in this appeal reads as under: -
"1. Whether on the facts of the case and in law the Ld. CIT(A) erred in allowing the carry forward of deficit of Rs. 5,93,48,771/- and allowing set off against the income of the subsequent years.
2. Whether, on the facts and in the circumstances 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, ignoring the fact that there was no express provision in the I T Act, 1961 permitting allowance of such claim.
3. Whether, on the facts and in the circumstances 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 2 ITA No. 6569/Mum/2016 Shri Yashwantrao Chavan Shikshan Prasark Mandal Personnel Selection, ignoring the fact 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 before the Apex Court in the case of MIDC(SPL (Civil) 9891 of 2014) as well as in other cases and the matter is pending for adjudication before the Hon'ble Supreme Court.
4. 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. 2,06,73,822/- 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 deduction 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.
5. Whether, on the facts and in the circumstances of the case and in law the ld CIT(A) erred in allowing the appeal, 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 DTR (Ker) 372 has decided the issue in the favour of the department after considering the decision of Hon'ble Supreme Court in the case of Escorts Ltd (199 JTR 43).
6. 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. Also, the id CIT(A) erred in relying upon the judgment of Hon'ble high Court in the case of CIT vs. Shri Vile-Pane Kelvani Mandal, without appreciating the fact that Department has not accepted the decision on merit and filed SLP, but subsequently withdrawn the same as there was no claim of depreciation on exempted assets. However, the issue is pending for adjudication before Hon'ble Supreme Court in other cases."
3. The first issue before us in this appeal is whether the surplus earning during the impugned assessment year can be set off against the deficit incurred by the assessee in the earlier year.
3 ITA No. 6569/Mum/2016Shri Yashwantrao Chavan Shikshan Prasark Mandal
4. We heard the rival submissions and gone through the orders of the tax authorities below. We noted that this issue is duly covered by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Institute of Banking Personnel Selection 264 ITR 110 in which the Hon'ble High Court concurring with the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Swetamber Murti Pujak Jain Mandal 211 ITR 293 (Guj) held as under: -
"Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment has been made having regard to the benevolent provisions contained in s. 11 and that such adjustment will have to be excluded from the income of the trust under s. 11(1)(a)."
5. No contrary decision was brought to our knowledge. We, therefore, confirm the order of the CIT(A). Revenue's ground on this issue is dismissed.
6. The second issue involved in this appeal relates to allowance of depreciation on fixed assets even though the expenditure incurred on the fixed assets have been claimed as for the objectives of the trust.
7. This issue is also duly covered by the decisions of the Hon'ble Bombay High Court in the case of CIT vs. Institute of Banking Personnel Selection 264 ITR 110 in which the Hon'ble High Court held as under: -
"..... However, the income of the trust is required to be computed under s. 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the trust. In view of the aforestated judgment of the Bombay High Court, we answer question No. 1 in the affirmative i.e., in favour of the assessee and against the Department."
Respectfully following the said decision of the Hon'ble Jurisdictional High Court we confirm the order of the CIT(A) on this issue.
4 ITA No. 6569/Mum/2016Shri Yashwantrao Chavan Shikshan Prasark Mandal
8. In the result, appeal filed by Revenue is dismissed.
Order pronounced in the open court on 10th July, 2017.
Sd/- Sd/-
(Pawan Singh) (P.K. Bansal)
Judicial Member Vice President
Mumbai, Dated: 10th July, 2017
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A) -1, Mumbai
4. The CIT (Exemptions)
5. The DR, "E" Bench, ITAT, Mumbai
By Order
//True Copy//
Assistant Registrar
ITAT, Mumbai Benches, Mumbai
n.p.