COMMISSIONER OF INCOME TAX, HISAR vs. MARKET COMMITTEE BHATTU

ITA/827/2010HC Punjab & HaryanaPHHC01093801201024 February 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), New Delhi. The appeal pertains to the assessment year 2004-05 and concerns the Market Committee, Bhuna, as the respondent assessee. The core of the dispute revolves around the allowability of depreciation on fixed assets for a charitable trust/institution, particularly when its income is computed under Sections 11 to 13 of the Act. The Revenue's contention is that capital expenditure is treated as application of income, leaving no asset or written down value (WDV) for depreciation claims.

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that the learned counsel for the Revenue fairly conceded that the issue was covered against the Revenue by a previous order of the same Court dated 5.7.2010 in I.T.A. No.535 of 2009, titled CIT v. Market Committee, Pipli. Consequently, following the precedent set in the Pipli case, the High Court found no reason to interfere with the ITAT's decision. The operative direction was to dismiss the appeals. No specific issue was left undecided.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was justified in holding that depreciation on fixed assets is allowable in the case of a charitable trust/institution, particularly when the income is computed as per the provisions of Sections 11 to 13 of the Income Tax Act, 1961, and capital expenditure is considered as application of income, leaving no assets/WDV for depreciation claim? Assessee's Arguments: The judgment does not record any specific arguments made by the assessee. Revenue's Arguments: The Revenue argued that when capital expenditure is treated as an application of income for a charitable trust, there remains no asset or written down value (WDV) from which depreciation can be claimed. Therefore, depreciation should not be allowable.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 11,Section 12,Section 13

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.827 of 2010 & connected case being ITA No.828 of 2010 Date of decision: 24.2.2011 The Commissioner of Income Tax -----Appellant. Vs. Market Committee, Bhuna. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr.Standing Counsel for the appellant. --- ADARSH KUMAR GOEL, J. This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, New Delhi in I.T.A. No.2720/Del/2008 for the assessment year 2004- 05 proposing following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Ld. ITAT was justified in holding that the depreciation on fixed asset is allowable in the case of charitable trust/institution particularly when the income is computed as per provisions of section 11 to 13 of the Income Tax Act, 1961 as question of depreciation does not arise when capital expenditure is also considered as application of income of the I.T.A. No.827 of 2010 assessee and there remains no assets/WDV for

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