INCOME TAX OFFCIER (EXEMPTION), WARD-2, JAIPUR, JAIPUR vs. GURUKUL SHIKSHAN SANSTHAN, SIKAR, SIKAR

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ITA 638/JPR/2017Status: DisposedITAT Jaipur18 September 2017AY 2010-114 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, stating that depreciation on fixed assets is allowable even if their entire cost was allowed as application of income. The jurisdictional High Court's decision on this matter was followed.

What were the facts?

The Assessing Officer disallowed depreciation on fixed assets, stating it was already allowed as application of income. The CIT(A) deleted this disallowance, following a Rajasthan High Court judgment. The Revenue appealed this decision.

What were the issues?

Whether depreciation on fixed assets is allowable when their entire cost has been claimed as application of income under Section 11.

Which sections of the Income-tax Act were involved?

Section 11,Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM vk;dj vihy la-@ITA No. 638/JP/2017

PER SHRI KUL BHARAT, JM.

This appeal by the Revenue is directed against the order of Ld. CIT (A)-III,

Jaipur dated 22.05.2017 pertaining to A.Y. 2010-11.

The Revenue has raised the following grounds of appeal:-

On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in:

1.

On the facts and in the circumstances of the case and in law the CIT(A) has erred in allowing claim of depreciation of Rs. 79,07,831/- on fixed assets in spite of the fact that the same was allowed as application of income u/s 11 at the time of purchase.

2.

On the facts and in the circumstances of the case and in law the CIT(A) has erred in allowing depreciation without appreciating the fact that the application of 100% expenditure of the capital asset is already allowed as capital expenditure hence further allowance of the depreciation on the same capital asset would amount to double allowance. 3. On the facts and in the circumstances of the case and in law the CIT(A) has erred in allowing depreciation without appreciating the fact that the

2 ITA No. 638/JP/2017. Gurukul Shikshan Sansthan, Sikar.

assessee has not carried out the business activities but the receipts utilized for charity. As there was not business activity the claim of depreciation was not allowable, the depreciation is allowable only in the case of business or profession or in the case of “income from other sources”.

2.

Briefly stated the facts of the case are that the case of the assessee was

picked up for scrutiny assessment and the assessment was framed under section

143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act) vide order

dated 11.03.2013. During the course of assessment proceeding, the Assessing

Officer noticed that assessee had claimed depreciation to the extent of Rs.

79,07,831/- in the I & E Account. The Assessing Officer held that depreciation on

the fixed assets whose entire cost has been allowed as deduction by way of

exemption u/s 12A is not admissible. Therefore, he made addition on the same in

the gross receipts of the assessee. Against this, the assessee preferred an appeal

before Ld. CIT(A), who after considering the submissions and following the

Judgment of the Hon’ble Rajasthan High Court rendered in the case of CIT vs. Krishi

Upaj Mandi Samiti (2015) 125 DTR 281 (Raj.H.C.), deleted the disallowance.

3.

Now, the Revenue is in appeal.

4.

Only effective ground is against deletion of disallowance of depreciation on

fixed assets.

4.1 Ld. D/R supported the order of the Assessing Officer.

4.2 On the contrary, Ld. Counsel for the assessee supported the order of the Ld.

CIT(A).

4.3 We have heard the rival contentions, perused the material available on

record. Ld. CIT(A) has decided this issue in para 4.3 of his order as under:-

3 ITA No. 638/JP/2017. Gurukul Shikshan Sansthan, Sikar.

“4.3 I have carefully considered the facts of the case, finding of the AO and submission of the appellant. It is seen that the Rajasthan High Court in the case of CIT vs. Krishi Upaj Mandi Samiti and other High Courts also held that depreciation on fixed assets is separately allowable even though entire fixed assets were allowed as application of income. Respectfully following the same, the disallowance made by AO is deleted.”

4.4 The Revenue has not disputed this fact, that the issue of allowance of

depreciation on fixed asset has been decided by the Jurisdictional High Court in the

case of CIT vs. Krishi Upaj Mandi Samiti (supra). Therefore, we do not see any

reason to interfere into the finding of the Ld. CIT(A), same is hereby affirmed.

Thus, ground raised by the Revenue is rejected.

In the result, appeal of the Revenue in ITA No. 638/JP/2017 is dismissed. Order is pronounced in the open court on Monday, the 18th day of September 2017.

Sd/- Sd/- ( HkkxpUn ½ ( dqy Hkkjr) ( BHAGCHAND) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 18/09/2017. Pooja/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

1.

The Appellant- ITO (E), Ward-2, Jaipur. 2. The Respondent – Gurukul Shikshan Sansthan, Sikar. 3. The CIT(A). 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 638/JP/2017)

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

4 ITA No. 638/JP/2017. Gurukul Shikshan Sansthan, Sikar.

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