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Income Tax Appellate Tribunal, DELHI BENCHES: BENCH “C” NEW DELHI
Before: SRI R.S.SYAL & SMT. BEENA A PILLAIShri Bankey Bihari Educational Society
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH “C” NEW DELHI
BEFORE SRI R.S.SYAL, VICE PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA No.2882/Del/2016 A.Y. 2012-13 JCIT (OSD), vs. Shri Bankey Bihari Educational Society Exemption-Circle NH 24, Near Masuri Canal Ghaziabad Ghaziabad PAN: AADTS4234G (Appellant) (Respondent)
Department by: Sri S.L.Anuragi, Sr.D.R. Assessee by: Sh. Akhilesh Kumar, Adv. Date of hearing: 04.06.2018 Date of Pronouncement: 06th June, 2018
ORDER PER BEENA A PILLAI, JUDICIAL MEMBER
Present appeal has been filed by revenue against order dated 08/02/16 passed by Ld.CIT (A) Aligarh, for Assessment Year 2012-13 on following grounds of appeal:
“1. The Ld.CIT (A) has erred in law and on facts in deleting the disallowance on account depreciation of Rs. 1,14,72,832/- ignoring the facts that on account of application of income for charitable purposes is not allowable as the capital expenditure on acquiring fixed assets has already been allowed in respective years and the
ITA No.2882/Del/2016 A.Y. 2012-13 JCIT vs. Shri Bankey Bihari Educational Society assessee has not furnished any computation of income to substantiate that it has not claimed purchase of fixed assets as application of income during the year. 2. The order of Ld. CIT(A) be cancelled and the order of the AO be restored. 3. Appellant craves leave to modify/ amend or add any one or more grounds of appeal.”
Brief facts of the case are as under: Assessee is a society registered under section 12AA and is running dental college in the name of Shree Bankey Bihari Dental College and Research Centre, Ghaziabad. For the year under consideration assessee filed its return of income on 26/09/12 declaring ‘nil’ income. The return was selected for scrutiny and notice under section 143 (2) of the Income Tax Act, 1961 (the Act) was issued in response to which various details were filed by assessee during the assessment proceedings. Ld.AO on examination of assessee’s claim for depreciation, was of the opinion that investment in capital asset as application of income and simultaneously claiming depreciation on the same would result into double deduction. Ld.AO accordingly disallowed claim of depreciation and made addition of Rs.1,14,72,82/-. 2.1. Aggrieved by the order of Ld. AO assessee preferred appeal before Ld.CIT (A) who allowed the claim of assessee. 3. Aggrieved by the order of Ld. CIT (A) revenue is in appeal before us now. 4. Ld.Sr.DR placed reliance upon the orders of Ld.AO wherein the claim was disallowed by placing reliance upon the decision of
ITA No.2882/Del/2016 A.Y. 2012-13 JCIT vs. Shri Bankey Bihari Educational Society Hon’ble Supreme Court in the case of Escorts Ltd vs Union of India reported in AIR 1993 SC 1325. 5. On the contrary Ld.AR submitted that the question before Hon’ble Supreme Court in the case of Escorts Ltd vs Union of India (supra) was whether dual deduction on account of capital expenditure for scientific research under section 35 (2) (iv) read with Explanation 1 to section 43 (1) of the Act can be allowed to an assessee for computation of business income. Hence he submitted that the principle laid down by Hon’ble Supreme Court was in respect of completely different facts vis-a-vis the facts in assessee’s case. Present assessee is a Charitable Institution and the application/income has to be computed under section 11 whereas the assessee before Hon’ble Supreme Court in Escorts Ltd (supra) was a commercial entity. It has been submitted by Ld.AR that provisions of section 35 (2) for not allowing depreciation on those assets for which deduction is allowed under section 35 (2) of the Act is applicable to Charitable Institution w.e.f. 01/04/15 by way of an amendment to Section 11 (6). He thus placed reliance upon the decision of Hon’ble Punjab and Haryana High Court in the case of CIT vs Tiny Tots Education Society reported in 330 ITR 21. 6. We have perused the submissions advanced by both the sides in the light of the records placed before us. 7. The dispute on the claim of depreciation arose as assessee claimed capital expenditure as application of income for exemption under section 11, and depreciation on the same assets. On perusal of the provisions of section 11 (6) as inserted by Finance Act, 2015 w.e.f. 1st of April 2015 stipulates that
ITA No.2882/Del/2016 A.Y. 2012-13 JCIT vs. Shri Bankey Bihari Educational Society 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 in respect of any asset, acquisition of which has been claimed as an application of income under section 11 in the same or any other previous years. Thus we are of the considered opinion that this provision is effective from Assessment Year 2015-16 and depreciation on assets where acquisition of asset has been claimed as application, thereafter shall not be allowed. Therefore up to Assessment Year 2014-15 depreciation on fixed assets whether purchase thereof claimed as application under section 11 or not would be admissible. 8. It is observed that Ld.CIT (A) while deciding the issue has placed reliance upon the decision of Hon’ble Supreme Court in the case of CIT vs Manav Mangal Society in SLP CC 9735/2010. Hon’ble Supreme Court, vide order dated 19/07/10 has dismissed the SLP, allowing claim of depreciation for computing exemption under section 11 of the Act. Therefore we do not find any infirmity in the observations of Ld.CIT (A) in deleting the addition made by Ld. AO. 9. Accordingly the ground raised by the revenue stands dismissed. 10. In the result appeal filed by revenue stands dismissed. Order pronounced in the open court on 06th June, 2018.
Sd/- Sd/- (R.S.SYAL) (BEENA A PILLAI) VICE PRESIDENT JUDICIAL MEMBER Dt. 06th June, 2018 *mv
ITA No.2882/Del/2016 A.Y. 2012-13 JCIT vs. Shri Bankey Bihari Educational Society