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Income Tax Appellate Tribunal, “J”
Before: HON’BLE SH.SHAMIM YAHYA, AM & HON’BLE SH. SANDEEP GOSAIN, JM
DCIT(E) 2(1) Samundra Institute of R. No. 507, 5th floor, Sai Maritime Studies Trust, R. No. 519, 5th floor, बिधम/ Commercial Complex, BKS, Piramal Chamber, Devshi Marg, Govandi, Vs. Lalbaug, Lower Parel, Mumbai-400088 Mumbai-400012 स्थायीलेखासं./जीआइआरसं./ PAN No. AACTS9557L (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant by : Ms. ArjuGarodia, DR प्रत्यथीकीओरसे/Respondentby : Shri Ashish Thakur, AR सुनवाईकीतारीख/ : 07/06/2018 Date of Hearing घोषणाकीतारीख / 04/07/2018 : Date of Pronouncement आदेश / O R D E R
Per Sandeep Gosain, Judicial Member:
The present Appeal filed by the revenueis against the order of Ld. CIT (Appeal) – 1, Mumbai dated 16.09.16for AY 2012- 13on the grounds mentioned herein below:-
Samundra Institute of Maritime Studies Trust 1. "Whether on the facts of the case and in law the Ld. CIT(A) erred in allowing the appeal of the assessee on account of disallowing depreciation on fixed assets of Rs. 1,24,46,138/- in contravention of the decision of Escorts Ltd. vs UOI 199 ITR 43 wherein it was held that since section 11 of the Icome Tax Act provides for deduction of capital expenditure incurred on assets acquired for the objects of the trust as application and does not specifically and expressly provide for double deduction on account of depreciation on the same very assets acquired from such capital expenditure, no deduction shall be allowed u/ s. 32 for the same or any other previous year in respect of that asset as it amounts to claiming a double deduction.
2. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the appeal, when the Delhi High court in the case of Charanjiv Charitable Trust and Kerala High Court in the case of Lissie Medical Institutions vs CIT 76 DTR (Ker) 372 has decided the issue in the favour of the department after considering the decision of the Hon'ble Supreme Court in the case of Escorts Ltd (199 ITR 43).
3. Whether, on the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in relying upon
Samundra Institute of Maritime Studies Trust the judgment of Hon'ble High Court in the case of CIT vs. Institute of Banking Personnel Selection without appreciating the fact that the Department has not accepted the decision on merit, but due to smallness of tax effect appeal was not filed before Hon'ble Supreme Court. However, the issue is pending for adjudication before Hon'ble Supreme Court in other cases.
4. The appellant prays that the order of the Commissioner of Income Tax (Appeals)-1, Mumbai be set aside and that of the Assessing Officer be restored.
The appellant craves leave to amend or alter any ground and /or add new grounds which may be necessary.
The brief facts of the case are thatassessee is a trust registered as a Charitableorganization with DIT(E), Mumbal u/s. 12A vide Registration No. INS/TR 37959 and with Charity Commissioner, Mumbai, vide Registration No. E- 20739(Mumbai). The assessee filed its return of income on 26.09.2012 along with the Income and Expenditure Account, Balance Sheet and Audit Report in Form No. 10B declaring total income at Rs. Nil. However, the A.O completed the assessment
Samundra Institute of Maritime Studies Trust vide order dated 26.02.2015 u/s. 143(3) of the I.T. Act, 1961 at taxable income of Rs. 5,53,62,350/-.
Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties partly allowed the appeal of the assessee.
Now before us, the revenue has preferred the present appeal by raising the above grounds.
Ground No. 1 to 3 3. Thesegrounds raised by the revenueare inter connected and inter related and relates to challenging the order of Ld. CIT(A)in allowing the appeal of the assessee on account of disallowing depreciation on fixed assets, therefore we thought it fit to dispose of these grounds by this common order.
At the very outset, Ld. AR appearing on behalf of the assessee submitted before us that the issue whether a charitable trust is eligible to claim depreciation on fixed assets even where the cost of the asset was allowed as deduction is covered by the Samundra Institute of Maritime Studies Trust order of Coordinate Bench of Hon’ble ITAT in for AY 2011-12 in assessee’s own case wherein the identical grounds raised in the present appeal have already been decided on merits.It was further submitted that the said issue has attained finality in favour of the assessee in CIT Vrs. Rajasthan &Gujrati Charitable Foundation Poona by Hon’ble Supreme Court in (2018) 300 CTR 0001. It was further submitted that the amendment in section 11(6) is effective from AY 2015-16 as held in above decision.
5. On the other hand, Ld. DR relied upon the orders passed by revenue authorities.
We have heard both the partiesand we have also perused the material placed on record as well as the orders passed by revenue authorities. We find that the identical ground has already been decided by the Coordinate Bench of Hon’ble ITAT in for AY 2011-12in assessee’s own case. The Samundra Institute of Maritime Studies Trust operative portion of the order of Hon’ble ITAT contained in para no. 3 to 10, which is reproduced below:-
Upon hearing the parties and on perusal of material placed before us, we find that the iss squarely covered in favour of the assessee by the decision of the Tribunal in assessee's own case AY 2010-11 order dated 18-07- 2016, wherein it has been held as under:-
"We have heard both the parties and perused the orders of the Revenue Authorities as well as the cited judgments of Hon'ble High Court of Bombay in the case of CIT vs. Institute of Banking, wherein it was held "that the Tribunal was right Th law in direct the Assess/hg Officer to allow depreciation on the assetsi the cost of which had been fully allowed as application of income under section 11 in the past years. Considering the binding iature of the judgments and the covered nature on the issue, we are of the opinion that the issue of allowability of depreciation on depreciable assets should be decided in favour of the assessee. Accordingly, the decision taken by the CIT (A) by allowing the assessee's claim in all the appeals under consideration is fair and reasonable and the same
Samundra Institute of Maritime Studies Trust does not call for any interference. Thus, all the grounds raised by the Revenue in all the appeals under consideration are dismissed."
We also find that in yet another order in assessee’s own case, vide order dated 16-09-2015 fc 2009-10, the "E" Bench of the Tribunal decided the very same issue in the following manner:-
5. "The issues raised by ground No. 1 have been considered by the Tribunal in ITA No. 5760/M/20.10 at para 9.6 on page-12 of its order and in in A.Y. 2008-09 at para-5 of its order. The relevant finding of the Tribunal in ITA No. 5760/M/10 in A.Y. 2007-08 reads as under:
"We, find the Delhi Bench of the Tribunal in the case of S.R.M Foundation of India "supra) while deciding the issue u/s. 10(22) of the LT Act has held that there is no requirement prescribed u/s. 10(22) that the institution should be recognized by an University or State or Central Government. The Tribunal in the said decision held 33 lessons of what is termed as Science of Creative Intelligence ('SC?) which are in thenature of Yoga Classes as education. The Tribunal while deciding the issue has considered the decision of the Samundra Institute of Maritime Studies Trust Hon'ble Supreme Court in the case of Sole Trustee, LokShikshan Trust (supra). We find the various other decisions relied on by the Ld.
Counsel for the assessee also support its case. The decision in the case of Bihar Institute of Mining and Mine Surveying (supra) in our opinion, is not applicable to the facts of the present case. In that case it was coaching of students for particular examination, for which it was held that coaching institution is not a charitable institution the meaning of section 2(15), However, in the instant case the assessee is giving training in the area of Pre Sea and Post Sea to sea men. The v a r i o u s other decisions relied on by the AO are also distinguishable and not applicable to the facts of the present case. In our opinion, merely because the courses are not approved by the DG Shipping or merely because there is huge surplus in the non- approved courses than the approved courses cannot be a ground for denial of exemption u/s.1 as long as the Trust is imparting education as per the objects of the Trust. In this view of the matter and in view of the detailed observations given by the Ld. CIT(A) on this issue we do not find any infirmity in the same and accordingly the same is upheld.
Samundra Institute of Maritime Studies Trust The grounds raised by the Revenue are accordingly dismissed."
Respectfully following the findings of the Co- ordinate Bench, ground No. 1 is dismissed.
The issue relating to the claim of depreciation has been decided in favour of the assessee and against the Revenue by the decision of the Hon'ble High Court of Bombay in the case of Institute of Banking Personnel Services 264 ITR 110 wherein the Hon'ble High Court has inter alia held as under: "In all such cases, section 32 of the Income-tax Act providing for depreciation for computation of income derived from business or profession is not applicable. However, the income of the trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the trust."
As the CIT(A) has allowed the relief following the order of the Hon'ble High Court of Bombay, we do not find any reason to interfere with the Ld. CIT(A). Ground No. 2 is accordingly dismissed."
Samundra Institute of Maritime Studies Trust 9. Consistent with the earlier decisions of the Tribunal in earlier assessment years, we do not see any merit in the appeal file by the revenue.
In the result, the appeal filed by the revenue is dismissed. Order pronounced in the open court on 27th October, 2017.
After having gone through the facts of the present case as well as considering the orders passed by revenue authorities and Hon’ble ITAT as mentioned above in assessee’s own case, we find that the identical issues have already been decided by the Hon’ble ITAT in assessee’s own case for AY 2011-12in ITA 206/Mum/16. Therefore,respectfully following the decision of the Coordinate Bench of Hon’ble ITAT and in order to maintain judicial consistency, we apply the same findings in the present case which are applicable mutatis mutandis in the present case.Resultantly, these grounds raised by the assessee stands dismissed.
Samundra Institute of Maritime Studies Trust Ground No. 4 & 5. 7. These grounds raised by the revenue are general in nature, thus requires no specific adjudication.
8. In the net result, the appeal filed by the revenue stands dismissed with no order as to cost. Order pronounced in the open court on 4th July 2018 Sd/- Sd/- (ShamimYahya) (Sandeep Gosain) लेखासदस्य / Accountant Member न्याययकसदस्य / Judicial Member मुंबई Mumbai;यदनांकDated : 04.07.2018 Sr.PS. Dhananjay आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant प्रत्यथी/ The Respondent 2. 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. यवभागीयप्रयतयनयध, आयकरअपीलीयअयधकरण, मुंबई/ DR, ITAT, Mumbai गार्डफाईल / Guard File 6. आदेशधिुसधर/ BY ORDER,