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

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ITA/188/2011HC Punjab & HaryanaPHHC01095507201118 July 2011Bench: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL2 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 the issues raised in the appeal were covered by a previous decision of the same Court in Income Tax Appeal No. 535 of 2009 (Commissioner of Income Tax, Karnal vs. Market Committee, Pipli), decided on 5.7.2010. In that earlier case, the appeal filed by the revenue had been dismissed. Therefore, following its own precedent, the High Court found no reason to interfere with the Tribunal's order. The ratio decidendi is that if the issue is covered by a prior judgment of the High Court, the appeal will be dismissed on that basis. The operative direction was the dismissal of the appeal.

What were the facts?

The assessee is Market Committee, Fatehabad, and the revenue is the Commissioner of Income Tax, Hisar. The assessment year in question is 2007-08. The appeal is filed by the revenue against the order dated 18.6.2010, passed by the Income Tax Appellate Tribunal, New Delhi Bench ('the Tribunal'). The Tribunal had allowed depreciation on capital assets even when the capital expenditure on their acquisition had already been allowed as an application of income for the purpose of exemption under Section 11 of the Income Tax Act. The revenue is challenging this decision of the Tribunal.

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 when capital expenditure on their acquisition had already been allowed as an application of income for exemption under Section 11 of the Income Tax Act, leading to a double deduction for the same expenditure? 2. Whether allowing depreciation on capital assets by the Hon'ble ITAT is justified in light of the Hon'ble Apex Court's decision in Escorts India Ltd. (199 ITR 43), which held that statutes should not permit two deductions on the same expenditure in the absence of clear statutory indication? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue argued that allowing depreciation on assets whose acquisition cost was already claimed as application of income under Section 11 amounts to a double deduction. They relied on the principle laid down in Escorts India Ltd. (199 ITR 43).

Which sections of the Income-tax Act were involved?

Section 260A,Section 11

AI-generated summary — verify with the full judgment below

" I- ~ :::J 0 U :r.: C> -J: <X: z ~ -~ <C J: Q Z <C OJ «..., z ~c.. l1li<,-,,'!C,,,-,'-='d Income Tax Appeal No. 188 of 2011 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. .; " / Income Tax Appeal No. 188 of 2011 Date of decision: 18.7.2011 , Commissioner of Income Tax, Hisar --- Appellant Versus Market Committee, Fatehabad -- 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 appellant-revenue. ' AJAY KUMAR MITTAL, J. This appeal under Section 260A of the Income-Tax Act, 1961 (for short "the Act") has been filed by the assessee against the order dated 18.6.2010, passed by the Income Tax Appellate Tribunal New Delhi Bench, Bench 'E', New Delhi (in short "the Tribunal") in - ITA No. 1337/0eI/2010, relating to the assessment year 2007-08. 2. The following substantial questions of law have been . claimed for determination of this Court: ,.(i) Whether on the facts and in the circumstances of the case. the Hon'b.le ITAT is justified in,allowing depreciation on capital assets even when capital expenditure on , .' 't

Income Tax Appeal No. 188 of 2011 2 acquisition of the corresponding assets had already, ~een allowed as <"application of income' for the purpos~ 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? (ii) Whether allowing of depreciation on the capitsl assets by f- a:: ::> 0u :I: C)-J:«z >E ~« ::t: C Z« CJ« JZ ::) c.. 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 ~thas 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 appellant-revenue fairly concedes- that the aforesaid issues are covered by the decision of this Court in Income Tax Appeal No. 535 of.2009 (Commissioner of Income Tax, Karnal vS', Market Committee, Pipli) decided on 5.7.2010 whereby the appeal filed on behalf of the revenue has been dismissed. 4. In view of the above, the appeal is dismissed. July 18, 2011 *rkmalik*

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