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Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI L.P. SAHU
separate impugned order of even date 24.2.2015, passed by Ld. CIT (Appeals) – 40, New Delhi for the quantum of assessment passed u/s143(3) for the assessment years 2010-11 and 2011-12. In both the appeals the common issues raised are as under:-
“1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in allowing the claim of depreciation of Rs.1,05,12,224/- to the assessee ignoring the fact that the assessee had claimed the amount incurred on purchase of assets in earlier years as application of income, on which depreciation is claimed now and further allowance of depreciation will be tantamount to double deduction.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the claim of depreciation of Rs.1,05, 12,224/ - to the assessee in view of the recent decision of the Hon'ble Delhi High Court in the case of DIT(E) vs Charanjiv Charitable Trust dated 18.03.2014.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the claim of carry forward of losses disregarding the facts that the set-off and carry forward of losses are dealt with by the provision of section 70,71,72,73 & 74 of the Income Tax Act.
4. On the facts and in the circumstances of the case and in law, t he Ld. CIT(A) has erred in allowing the claim of carry forward of losses disregarding the facts that the provision of the Act are not applicable in the cases who are claiming exemption u/s 11&12 of the Income Tax Act, 1961.”
In the assessment year 2011-12 the figure of depreciation as appearing in ground No. 1 is Rs. 1,26,75,940/- otherwise the grounds are identical.
The facts in brief are that assessee society is registered under Societies Registration Act, 1860. Looking to its objects which are were for ‘charitable purposes, it was granted registration u/s 12AA(1) vide order dated 16.10.2008. The AO noted that assessee has claimed expenditure on account of depreciation of Rs. 1,05,12,224/- for the assessment year 2010-11; and Rs. 1,26,75,940/- for the assessment year 2011-12. According to the AO the assessee is claiming depreciation and capital expenditure both as of application of income and therefore, it amounts to double deduction. After referring to the judgment of the Hon’ble Supreme Court in the case of Escorts Ltd. vs Union of India 199 ITR 43, he disallowed the claim of depreciation. He further held that the provision of section 11 r.w.s 12 and 13 do not envisage set off of deficit/excess expenditure of earlier assessment years and accordingly, he disallowed the set off of loss of earlier deficit with current year income.
Before the Ld. CIT (A), the assessee relied upon the following decisions of allowability of depreciation:-
1) CIT vs. Market Committee, Pipli, 330 ITR 16 (2011) (P&H);
2) CIT vs. Rajpur Pallottine Society, 180 ITR 579 (1989)(MP);
3) CIT vs. Rao Bahadur Calavala Cnnan Chetty Charities, 135 ITR 198 (1982) (Mad); 4) CIT vs. Sheth Manilal Ranchhoddas Vishram Bhavan Trust, 1198 ITR 598 (1992) (Guj). 5) CIT vs. Society of the Sisters of St. Anne, 146 ITR 28 (1984) (Karn). 6) CIT vs. Institute of Banking, 264 ITR 110 (2003) (Bom).
7) CIT vs. Tiny Tots Education Society, 330 ITR 21 (2011)(P & H) 8) CIT vs. Sheth Manilal Ranchhoddas Vishram Bhavan Trust, 1198 ITR 598 (1992) (Guj) 9) CIT vs. Society of the Sisters of St. Anne, 146 ITR 28 (1984)(Karn) 10) CIT vs. Institute of Banking, 264 ITR 110 (2003) (Bom)
11) CIT vs. Tiny Tots Education Society, 330 ITR 21 (2011)
(P & H).
Heavy reliance was also placed on the judgment of Hon’ble Delhi High Court in the case of DIT (Exemption) vs. Indraprastha Cancer Society in & 464/2014 order dated 18.11.2014. Ld. CIT (A), though allowed assessee’s claim, however held that it is not correct, but since there is a jurisdictional high Court judgments, therefore, he is following the same.
In so far as set off of carried forward of losses and deficit adjustment with the current year the reliance was placed on following decisions:- i) CIT vs. Maharana of Mewar Charitable Foundation, 164 ITR 439 (Raj) 1987 ii) CIT vs. Shri Plot Swetamaber Murti Pujak Jain Mandal, 211 ITR 293 (Guj) 1995 iii) CIT vs. Matrisewa Trust, 242 ITR 20(Mad) 2000 iv) Govindu Naicker Estate vs. ADIT, 248 110 (Bom)2003 v) CIT vs Institute of Banking , 264 ITR 110 (Bom)2003 vi) DIT vs. Raghuvanshi Charitable Trsut, 197 TAxmann 170 (Delhi) 2011 vii) CIT vs. Gujarat Samaj, 349 ITR 559 (MP)2012
Ld. CIT (A) following the precedence of various jurisdictional High Court directed the AO to allow the benefit of carry forward of the deficit or loss.
After hearing Ld. DR and on perusal of the impugned order we find that, since the issues raised in the grounds of appeal are squarely covered by the judgement of Hon’ble Jurisdictional High Court and other High Courts which has been followed by the Ld. CIT (A), therefore, we do not find any merits in the grounds raised by the department and accordingly the assessee’s current claim is allowed which is in lying with the judicial precedence of the aforesaid High Court judgments.
In the result appeal of the revenue is dismissed.