ADIT (E), NEW DELHI vs. PRAKASH EDUCATIONAL SOCIETY, NEW DELHI

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ITA 4232/DEL/2014Status: DisposedITAT Delhi31 October 2017AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal, following the Delhi High Court's decision in DIT (E) Vs. Indraprastha Cancer Society. The High Court held that depreciation is allowable on assets whose cost was previously allowed as application of income, and the amendment prohibiting this is not applicable to the assessment year in question.

What were the facts?

The Revenue appealed against the CIT(A)'s decision allowing depreciation on assets for which the cost was already claimed as application of income by a charitable trust. The AO disallowed depreciation, viewing it as double deduction.

What were the issues?

Whether depreciation is allowable on assets where the cost has already been allowed as application of income for a charitable trust, and if the recent amendment prohibiting this applies.

Which sections of the Income-tax Act were involved?

Section 11

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI

Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI

For Respondent: Shri Atiq Ahmad, Sr. DR
Hearing: 30/10/2017Pronounced: 31/10/2017

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the Revenue against the order of the ld CIT(A)-XXI, New Delhi dated 29.05.2014 for Assessment Year 2010-11 raising two grounds of appeals as under:-

“1. On the facts and in the circumstances of the case and in law, the ld CIT(A) has erred in allowing depreciation of Rs. 6651434/- ignoring the fact that where the capital expenditure has been treated to have been applied for the object of the trust, allowable of deduction on account of depreciation will amount to double deduction.

2. On the facts and in the circumstances of the case and in law, the ld CIT(A) has erred in ignoring the recent judgment of the jurisdictional High Court in the case of Charanjiv Charitable Trust Vs. DIT(E) in 322 and 323/2013 dated 18.03.2014 wherein the Hon'ble High Court has held the Tribunal was not justified in directing the allowance of depreciation in respect of such assets.”

2.

Brief facts of the case is that the assessee is a charitable trust who filed its return of income on 13.10.2010 showing Nil income. The assessee is a society registered u/s 12A of the Act and is carrying on the charitable object of running of school and colleges. For the Assessment Year the income of the assessee was assessed at a deficit of Rs. 42710715/-. The main reason for the addition made by the ld Assessing Officer is that assessee has claimed depreciation of Rs. 6651434/- on assets which have been already granted to the assessee as deduction as application of income in the year they were acquired. Therefore, the ld AO was of the view that it amounts to double deduction hence, he disallowed the depreciation. The assessee preferred an appeal before the ld CIT(A), who vide order dated 22.03.2013 allowed the claim

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