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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ : NEW DELHI
Before: SHRI R.S.SYAL, HON’BLE & SHRI LALIET KUMAR
PER LALIET KUMAR, JUDICIAL MEMBER :
The present appeal is being filed by the revenue challenged the assessee on the following grounds :- “
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing exemption u/s 11 & 12 of the I.T.Act by ignoring the fact that the activities of the assessee are hit by proviso to section 2(15) of the I.T.Act.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing depreciation by ignoring the fact that where the capital expenditure has been treated to have been applied for the object of the trust, allowance of deduction on account of de;recitation will amount to double deduction.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing Rs. 1,74,22,488/- u/s 40(A)(ia) of the Act by ignoring the fact that assessee has intentionally violated provisions of Chapter XVII-B of the Act.”
The Ld. AR has drawn our attention to the order passed by the Tribunal for the assessment year 2010-11, 2013-14 and 2014-15 in 238 and 239/Del/2018 wherein the Tribunal in paragraph 7, 8 and 9 has held as under :-
“7. We have heard the arguments on either side and gone through the record in the light of the submissions. On a careful perusal of the order dated 30/06/2017 and the papers in these appeals, we find that the facts and grounds of appeals involved in these appeals are substantially the same as in ITA number 2130/Del/2012 for the assessment year 2008-09. In the said appeal a coordinate bench of this Tribunal found that the activities of organising conference and seminars of various ornament and non-government agencies are not with the aim of earning any profit. It was further held that insofar as the application of income from conference and seminars towards the objective of the assessee society is not in dispute, withdrawal of the exemption under section 11 and 12 of the Act is not justified. The Tribunal further held that the provisions of section 40(a)(ia) of the Act are contained in chapter IV-D of the Act dealing with the "Profit and Gains of Business and Profession" and become operational only when income is assessable under that head and since the income is earned by the assessee has been held as exempt under section 11 and 12 of the Act, the rigours of provisions of section 40(a)(ia) of the Act cannot be applied to the facts of the assessee. The Tribunal, therefore, deleted the addition made under section 40(a)(ia) of the Act.
8. Ld. DR argued that non-deduction of tax in respect of provision of payment to CIVTC attracts the provisions under 916. 238 and 239/Del/2018 section 40(a) (ia) of the Act. He placed reliance on the decisions reported in Palam Gas Service vs. CIT, Civil Appeal No. 5512 of 2017 (Supreme Court) and PCIT verses Manzoor Ahmed Walvir 84 taxmann.com 233 (J and K) and Academy of Medical Services verses CIT 91 taxmann.com 239 (Kerela).
9. However, admittedly there is no change in the facts and circumstances through the assessment years 2008-09, 2010- 11, 2013- 14 and 2014-15. In these circumstances there is no material before us to deviate from the view taken by a coordinate bench of this Tribunal for the assessment year 2008-09 or to reach a different conclusion. We, therefore, while respectfully following the same find that the impugned orders do not suffer any illegality and irregularity and do not warrant any interference by this Tribunal. We, accordingly, dismiss these appeals.
Ld. DR has not disputed the decision of Tribunal and has further submitted that the said decision only applicable to the ground no. 1 and 3 raised by the revenue and not applicable to ground no. 2.
On the other hand, Ld. AR has drawn our attention to paragraph 4.1 of the CIT order wherein the Ld. CIT has dismissed the ground raised
by the assessee on the pretext that the same become infructuous, in view of the finding recorded by the Ld. CIT with respect to ground no. 1 and 3. The similar arguments were raised by the assessee before us whereby the Ld. AR relied upon the decision of the Tribunal mentioned hereinabove and has submitted that the adjudication of ground no. 2 had, became academic and in consequential, once it is held that the income earned by the assessee is an exempt income in view of applicability of the provisions of Section 11 and 12 of the Act.
We have heard the rival contention and perused the material available on record. The Tribunal in its order dated 05.07.2018 (supra) case of the assessee has already decided the ground no. 1 and 3 to which there is no cavil. Hence, the appeal of the revenue is required to be dismissed with respect to ground no. 1 and 3.
Now, coming to the ground no. 2 of the revenue. In this regard, we may like to know record that as per section 11(6) of the Act which is applicable to the year under consideration, the assessee is entitled to the depreciation in accordance with law.
For the ready reference, we are reproducing hereinbelow Section 11(6) of the Act to the following effect.
“6. In this section where any income is required to be applied or accumulated or set apart for application, then, for such purposes the income shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under this section in the same or any other previous year.”
As is clear from the bare reading of the provision, the assessee is entitled to deduction on account of depreciation and therefore, the appeal of the revenue is not maintainable on this ground also and hence, the appeal of the revenue is dismissed on all the grounds.
In the final result, appeal of the revenue is dismissed.
Order pronounced in open court on 11th October, 2018.