COMMISSIONER OF INCOME TAX, HISAR vs. MAHARAJA AGGARSAIN MEDICAL EDUCATION & SCIENTIFIC RESEARCH SOCIETY

ITA/693/2010HC Punjab & HaryanaPHHC01093654201014 December 2010Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL2 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, dated April 30, 2009. The appeal concerned Assessment Year not specified in the judgment. The dispute revolved around the allowability of depreciation on fixed assets for a charitable trust/institution whose income is computed under Sections 11 to 13 of the Act. The Revenue argued that capital expenditure is treated as application of income, leaving no asset or written down value (WDV) for depreciation claims. The High Court was considering the substantial questions of law proposed by the Revenue.

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 stated that the matter was covered against the Revenue by a judgment of the High Court dated July 5, 2010, in I.T.A. No. 151 of 2010, CIT v. Market Committee, Narwana. Consequently, the appeal was dismissed based on this precedent. The specific reasoning of the ITAT on the allowability of depreciation for charitable trusts, which was the subject of the Revenue's appeal, was not elaborated upon by the High Court in this judgment, other than acknowledging that the issue was decided against the Revenue by the ITAT and that the High Court's own prior judgment covered the matter against the Revenue.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the learned ITAT was justified in holding that depreciation on fixed assets is allowable in the case of a charitable trust/institution, particularly when income is computed as per Sections 11 to 13 of the Income Tax Act, 1961, and capital expenditure is considered as application of income, thus leaving no assets/WDV for depreciation claims? Revenue's Contention: The Revenue argued that when capital expenditure is treated as an application of income for a charitable trust, there remains no asset or WDV for claiming depreciation. They drew strength from the Supreme Court's decision in Escorts Ltd. & another Vs. Union of India and others (199 ITR 43 (108) CTR 275), which held that no depreciation is allowed under Section 32 if deduction for capital expenditure is allowed under Section 35(2)(iv), based on the principle that double deduction is not intended without clear statutory indication. Assessee's Contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 11,Section 12,Section 13,Section 32,Section 35(2)(iv)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 14.12.2010 Commissioner of Income Tax. -----Appellant. Vs. Maharaja Aggarsain Medical Education & Scientific Research Society. -----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 Revenue. --- 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 dated 30.4.2009 in I.T.A. No.1408/Del/08 proposing to raise following substantial questions of law:- “i) Whether on the facts and in the circumstances of the case, the learned 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 sections 11 to 13 of the Income Tax Act, 1961 and question of depreciation does not arise when capital expenditure is also considered as application of income of the assessee and there remains to assets/WDV for

The order continues below.

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