THE DY. CIT (EXEMPTIONS), CIRCLE-2, AHMEDABAD vs. AMRELI JILLA VIDHYASABHA, AMRELI

आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’B’ BENCH, AHMEDABAD BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND Ms MADHUMITA ROY, JUDICIAL MEMBER अपील सं./ITA No.2720/Ahd/2017 &�नधा�रण वष�/Asstt. Year:2014-2015

D.C.I.T, Amreli Jilla Vidhyasabha, (Exemption), Place Vidhya Vihar, Vs. Circle-2, Varasada Road, Ahmedabad. Amreli-365601.

PAN: AAATA4252C

(Applicant) (Responent) Revenue by : Ms Aparna Agarwal, CIT,D.R : Assessee by Written Submission सुनवाई क� तार�ख/Date of Hearing : 06/03/2019 घोषणा क� तार�ख /Date of Pronouncement: 07/03/2019 आदेश/O R D E R PER Ms MADHUMITA ROY, JUDICIAL MEMBER:

The instant appeal preferred by the Revenue is against the order dated 20.09.2017, passed by the Learned Commissioner of Income Tax(Appeals)-7, Ahmedabad, u/s.143(3) of the Income Tax Act, 1961( herein after referred to as ‘’the Act’’) arising out of the order dated 26.12.2016 passed by the D.C.I.T, (Exemption), Circle-2, Ahmedabad) for the Assessment Year 2014-15, against the deletion of addition in respect of depreciation of the asset of the assessee’s trust to the tune of Rs.1,91,78,218/- made by the Assessing Officer.

ITA No.2720/Ahd/2017 A.Y.2014-2015 2 2. At the very outset of the proceeding the Ld. Advocate appearing for the assessee submitted before us that the issue is squarely covered by the order passed by the Co-ordinate Bench in assessee’s own case in ITA bearing No.2344/Ahd/2016 for A.Y. 2012-13 passed relying upon the ratio laid down by the Hon’ble Apex Court in the matter of Rajasthan Gujarati Charitable Foundation, Poona. The Co-ordinate Bench in the case of DCIT (Exemption) Vs N.H. Kapadia Education Trust in ITA No.3090/Ahd/2015 by its order dated 08.01.2018 has also settled the issue in favour of the assessee.

4.1 It also appeared that the Ld.CIT(A) has deleted the disallowance of depreciation relying upon the judgment passed by the Jurisdictional High Court in the case of CIT Vs Sheth Manilal Ranchhoddas Vishram Bhavan Trust reported in ITR 588.

ITA No.2720/Ahd/2017 A.Y.2014-2015 3 4.2 We have also gone through the order passed by the Co-ordinate Bench in assessee’s own case for the Assessment Year 2012-13 dealing with the same issue; the relevant portion whereof is as follows:

‘’…2. By way of its grounds of appeal, the Revenue has impugned the action of the CIT(A) in deleting the addition of Rs.1,43,07,625/- towards depreciation disallowed by the AO. 3. As pointed out on behalf of the assessee through its written submissions, we find that the issue is squarely covered in favour of the assessee by the judgment of the Hon’ble Supreme Court in the case of Rajasthan Gujarati Charitable Foundation, Poona. In the light of the judgment of Hon’ble Supreme Court, the co-ordinate bench in case of DCIT(Exemptions) vs. N. H. Kapadia Education Trust ITA No. 3090/Ahd/2015 order dated 08.01.2018 has dealt with the issue in favour of the assessee as under: “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 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

ITA No.2720/Ahd/2017 A.Y.2014-2015 4 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, placed in the similar facts, we do not see any reason to disturb the order of the CIT(A) on this score. 5. In the result, the appeal of the Revenue is dismissed…’’

4.3 Respectfully relying upon the judgment passed by the Co-ordinate Bench, in view of the judgment and order passed by the Hon’ble Apex Court in the matter of Rajasthan Gujarati Charitable Foundation, we do not find any merit in the appeal preferred by the Revenue. Hence the same is dismissed.

Order pronounced in the Court on 07/03/2019 at Ahmedabad.

-Sd- -Sd- (AMARJIT SINGH) (Ms MADHUMITA ROY) ACCOUTANT MEMBER JUDICIAL MEMBER (True Copy) Ahmedabad; Dated 07/03/2019 Manish आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण / DR, ITAT, 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad