COMMISSIONER OF INCOME TAX, SEC-14, HISAR vs. MARKET COMMITTEE JAKHAL

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ITA/177/2011HC Punjab & HaryanaPHHC01095495201108 July 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the revenue. The Court noted that the revenue's counsel fairly conceded that similar questions had been adjudicated upon by the High Court against the Revenue in Income Tax Appeal No. 535 of 2009 (The Commissioner of Income Tax, Karnal vs. Market Committee, Pipli), decided on 5.7.2010, where the revenue's appeal was dismissed. Therefore, following the precedent set in the earlier case, the present appeal was also dismissed. The specific reasoning of the Tribunal or the High Court on the merits of the double deduction argument or the applicability of the Escorts India Ltd. case to the facts of this specific appeal was not elaborated upon, as the dismissal was based on the concession and the prior judgment.

What were the facts?

The Revenue, Commissioner of Income Tax, Hisar, filed an appeal under Section 260A of the Income-Tax Act, 1961, against an order dated 18.6.2010 passed by the Income Tax Appellate Tribunal, New Delhi. The appeal pertained to assessment year 2007-08 and challenged the Tribunal's decision allowing depreciation on capital assets. The assessee is Market Committee, Jakhal. The core of the dispute revolves around whether depreciation can be allowed on capital assets when the expenditure incurred for their acquisition was already treated as an 'application of income' for the purpose of exemption under Section 11 of the Act.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is justified in allowing depreciation on capital assets even when capital expenditure on acquisition of the corresponding assets had already been allowed as 'application of income' for the purpose of allowing exemption under Section 11 of the Income Tax Act, and as such, further allowing of depreciation on these capital assets will amount to double deduction for the same expenditure? 2. Whether allowing of depreciation on the capital assets by Hon'ble ITAT is justified in the light of the Hon'ble Apex Court decision in the case of Escorts India Ltd. (199 ITR 43), wherein it has been held that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue argued that allowing depreciation on assets for which the acquisition cost was already claimed as an application of income under Section 11 would constitute a double deduction for the same expenditure. They relied on the Supreme Court's decision in Escorts India Ltd. v. CIT.

Which sections of the Income-tax Act were involved?

Section 260A,Section 11

AI-generated summary — verify with the full judgment below

,~ }- ~ ::.> 0u :I: i~n' ;- J: ,~ Z ~ ~« J: 0z <! OJ <t: J Z ::J a.. ~ Income Tax Appeal No. 177 of 2011 t1 1 '/ IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Income Tax Appeal No. 177,of 2011 Date of decision: 8.7.2011 Commissioner of Income Tax Hisar ---Appellant Versus Market Committee, Jakhal --- Respondent CORAM: HON'BlE MR. JUSTICE ADARSH KUMAR GOEl ACTING CHIEF JUSTICE HON'BlE MR. JUSTICE AJAY KUMAR MITTAl Present: 'Mr. Yogesh Putney, Senior Standing Counsel for the appellanFrevenue. AJAY KUMAR MITTAL. J. This appeal under Section 260A of the Income-Tax Act, 1961 (for short "the Act") has been filed by the revenue against the order dated 18.6.2010, passed by the Income Tax Appellate Tribunal I New Delhi, Bench 'E' (in' short "the Tribunal") in. ITA No. 1336/DeI/2010, relating to the assessment year 2007~08. 2. The following substantial questions of law have been claimed for determination of this Court: "1- Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is justified in allowing depreciation on capital assets even when capital expenditure on acquisition of the corresponding assets had already been r ~ , ~~ ----- Income Tax AQ2eal No. 177 of 2011 2 -. allowed as 'application of income' for the purpose of allowing exemption under Section 11 of, the Income Tax Act and as such further allowing of depreciation on these capital asset~ will amount to double deduction for the same expenditure? 2- Whether allowing of depreciation on the capital assets by Hon'ble ITAT is justified in the light of the Hon'ble Apex Court decision in the case of Escorts India Ltd. (199 ITR, . l- e::: :J 0 () J: tn l..I-J: ~z<! >- a:«:I: O J'' ,, Z« UJ « ~z:J a... 43), wherein it has been held that in the absence of clear statutory indication to the contrary, the statute should not , be read as to permit an assessee two deductions on the same expenditure?" 3. , Learned counsel for the revenue fairly conceded' that *rkmalik* ".>C..."... .~. ""--'-"'"-'-~

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