M/S. G.D. BIRLA MEDICAL RESEARCH AND EDUCATIONAL FOUNDATION,MUMBAI vs. ASSTT COMM OF INCOME TAX (APPEALS) -EXEM CIRCLE -1 OR NFAC DELHI, MUMBAI

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ITA 1833/MUM/2022Status: DisposedITAT Mumbai29 September 2022AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee had provided supporting evidence to the lower authorities, which were not properly considered. Therefore, the issue of depreciation claim was restored to the CIT(A) for fresh adjudication.

What were the facts?

The assessee trust claimed depreciation on assets. The Assessing Officer disallowed this claim, stating the assessee failed to provide evidence that these assets were different from those claimed as application of income earlier. The CIT(A) upheld this disallowance.

What were the issues?

Whether depreciation can be claimed on assets if their cost was not claimed as application of income earlier, and whether the lower authorities properly considered the evidence provided by the assessee.

Which sections of the Income-tax Act were involved?

Section 11(6),Section 143(3),Section 250,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: SHRI KULDIP SINGH & SHRI AMARJIT SINGH

Hearing: 13.09.2022Pronounced: 29.09.2022

Appellant by : Deep Chouhan Respondent by : Kailash Kanojia Date of Hearing 13.09.2022 Date of Pronouncement 29.09.2022 आदेश / O R D E R Per Amarjit Singh (AM):

The present appeal filed by the assessee is directed against the order passed by the NAFC, Delhi, which in turn arises from the order passed by the A.O u/s 143(3) of the Income Tax Act, 1961, for A.Y. 2017- 18. The assessee has raised the following grounds before us: “GROUND NO. 1: VIOLATION OF PRINCIPLES OF NATURAL JUSTICE:

1. On the facts and in circumstances of the case and in law, the Ld CIT(A) erred in passing the order u/s 250 of the Act on the basis partial submission/ details filled by the Appellant during the course of 2 M/s G.D. Birla Medical Research and Educational Foundation Vs. ACIT, Exemption, Circle-1 proceedings, disregarding Appellant's request for time for preparation of details during the course of appellate proceedings.

2. The Appellant prays that the order passed by the Ld. CIT(A) u/s 250 of the Act be held asbad in law and same be quashed/set aside. WITHOUT PREJUDICE TO GROUND NO.1 GROUND NO. 2: DISALLOWANCE OF DEPRICIATION AMOUNTING TO RS.13,69,078/-:

1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of Id. AO of disallowing depreciation of Rs.13,69,078/-, while computing income for the year under consideration, on the alleged ground that the Appellant has failed to comply with the provisions of section 11(6) of the Act

2. The Ld. CIT(A) failed to appreciate and ought to have held that out of the total depreciation of Rs.13,69,078/- is allowable since the Appellant had never claimed any corresponding amount as application u/s 11(6) of the Act.

3. The Appellant prays that the claim of depreciation of Rs. 13,69,078/- be allowed as deduction. GROUND NO. 3: LEVY OF INTEREST UNDER SECTION 234B OF THE ACT:

1. The Ld. CIT(A) erred in confirming the levy of interest u/s. 234B of the Act.

2. The Appellant prays that the interest charged u/s 234B of the Act be deleted. GENERAL The Appellant craves leaves to add to, alter and/or amend any of the above grounds of appeal on or before the date of hearing.”

2. The fact in brief is that assessee has e-filed its return of income on 30.10.2017 along with Form 10B declaring total income at Rs. nil. The case was selected for scrutiny and notice u/s 143(2) of the Act was issued on 11.08.2018. The assessee trust was running educational institutions and charitable institution in providingmedical or educational object. During the course of assessment the A.O noticed that assessee claimed depreciation amounting to Rs.15,51,194/-. The A.O had disallowed the claim of depreciation on the ground that assessee failed to 3 M/s G.D. Birla Medical Research and Educational Foundation Vs. ACIT, Exemption, Circle-1 furnish relevant evidence that the assets on which depreciation had been claimed were different from the assets which were claimed as application at the time of investment made.

3.

Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee stating that assessee was unable to the identify such assets for which costs was not claimed as application of income in the earlier year. 4. During the course of appellate proceedings before us the ld. counsel submitted that assessee had categorically explained before the A.O and ld. CIT(A) along with the relevant supporting evidences that the assets on which depreciation had been claimed were different from the assets which was claimed as application at the time of investment made. In support of its contention the ld. Counsel has referred factual paper book filed during the course of appellate proceedings comprising copies of document and detail filed in support of its claim before the lower authorities. On the other hand the ld. D.R. supported the order of lower authorities. 5. Heard both the sides and perused the material on record. During the course of assessment the A.O had disallowed the claim of depreciation of the assessee of Rs.15,51,194/- on the ground that the assessee has not provided any evidences that the depreciation claimed pertained to the assets purchased but not claimed as application at the time of investment made. As discussed above the assessee has filed supporting evidence to substantiateitsclaim of depreciation before the A.O and the ld. CIT however, both the authorities have not considered 4 M/s G.D. Birla Medical Research and Educational Foundation Vs. ACIT, Exemption, Circle-1 the submission of the assessee before disallowing the claimof depreciation of Rs.15,51,194/-. In view of the above facts and circumstances we restore this issue pertaining to the claim of depreciation of Rs.15,51,194/- to the file of the ld. CIT(A) for deciding afresh after examination and verification of the relevant supporting document furnished by the assessee. Therefore, this ground of appeal is allowed for statistical purposes.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

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