CENTRAL TOOL ROOM,LUDHIANA vs. DCIT, C-1 (EXEMPTIONS), CHANDIGARH

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 28.09.2018 of the Commissioner of Income Tax-4 , Ludhiana [hereinafter referred to as’ CIT(A)’ ].

ITA No. 1563-C-2018 Central Tool Room, Ludhiana 2 ‘Charitable Institution’ u/s 12A of the Income Tax Act, 1961 (in short

'the Act'). For the earlier assessment years, the appellant-assessee was

granted exemption from taxation u/s 11 of the Income Tax Act.

However, for the year under consideration, the Assessing Officer did

not allow the assessee the exemption u/s 11A of the Act and assessed

the income of the assessee under normal provisions treating the

assessee as ‘Association of Persons’(‘AOP’). Though, the assessee in

this appeal has not contested the action of the Assessing Officer in

denying exemption to the assessee u/s 11 of the Act, however, the sole

grievance of the assessee is that the Assessing Officer has not allowed

the depreciation on the capital assets as per the provisions of the Income

Tax Act. The assessee has pleaded that it should be allowed depreciation

at the rate as applicable to an ‘AOP’ under the provisions of the Act

and further it should be allowed depreciation on the additions of plant

and machinery made during the assessment year under consideration

2015-16.

assessee in earlier years had claimed exemption u/s 11 of the Act and

the expenditure incurred on capital assets had already been allowed as

application of income, hence, the depreciation should not be allowed on

the capital assets as it will amount to double deduction.

ITA No. 1563-C-2018 Central Tool Room, Ludhiana 3 4. In rebuttal, the Ld. Counsel for the assessee has submitted that the

assessee had not claimed any expenditure on capital assets as

application of income in the earlier assessment years during which the

assessee was allowed exemption from taxation as per the provisions of

section 11 of the Act.

of the parties have submitted that this factual issue whether the assessee

had claimed expenditure on capital assets as application of income in

earlier years is required to be thoroughly examined by the Assessing

Officer. Therefore, it has been submitted that the matter be restored to

the file of the Assessing Officer for decision afresh on this issue.

We accordingly, restore this issue to the file of the Assessing

Officer to decide the issue relating to the depreciation on capital assets

afresh after considering the submissions of the assessee and verification

of the record relating to the claim of the assessee that it had not claimed

expenditure on capital expenditure as application of income in earlier

assessment years. If the claim of the assessee is found to be correct

then the Assessing Officer to allow the claim of depreciation to the

assessee as per the provisions of Income Tax Act irrespective of the

treatment given in the account books of the assessee.

ITA No. 1563-C-2018 Central Tool Room, Ludhiana 4 With the above directions, the appeal of the assessee is treated as allowed for statistical purposes.

Order pronounced in the Open Court on 13.08.2019.

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member

Dated : 13.08.2019 “आर.के.”

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar