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Income Tax Appellate Tribunal, DELHI BENCHES : SMC: NEW DELHI
Before: SHRI H.S. SIDHU
This appeal filed by the assessee is directed against the order passed by the CIT(A), Ghaziabad on 29.5.2015 in relation to the assessment year 2011-12 on the following concise grounds:-
That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.25,37,255/- on account of hostel surplus fee receipts by treating it as business income in the hands of appellant uls
11 (4 )/11 (4A) and that too by recording incorrect facts and findings and without observing the principles of natural justice.
2. That in any case and in any view of matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making
addition of Rs.25,37,255/- as business income in the hands of appellant is bad in law and against the facts and circumstances of the case.
That having, regard to the facts and circumstances
of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in making disallowance of Rs.l,01,41,449/- on account of depreciation claimed by the assessee and that too by recording incorrect facts and findings and without observing the principles of natural justice.
4. That the appellant craves the leave to add, modify,
amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.
The brief facts of the case are that the assessee is a charitable society/ trust registered under the Society Registration Act, 1860 w.e.f.
25.7.2008. The society was granted u/s. 12AA of the Income Tax Act, 1961 on 21.12.2011 by the Ld. CIT, Ghaziabad. The Society is also approved u/s. 80G of the Income Tax Act, 1961. The return of income was filed on 20.12.2011 declaring NIL income. The case was processed u/s. 143(1) of the I.T. Act, 1961. The case was selected for scrutiny assessment. The AO made various disallowances, addition and the assessment was completed on a taxable income of Rs. 25,37,255/- vide his order dated 7.3.2014 passed u/s. 143(3) of the I.T. Act, 1961.
3. Being aggrieved the assessee carried the matter to the ld. CIT(A) who confirmed some actions of the AO and partly allowed the appeal of the assessee vide his order dated 29.5.2015.
Now the assessee is aggrieved by the impugned order and filed the present appeal before the Tribunal.
At the time of hearing, Ld. Counsel of the assessee stated that the lower authorities have wrongly made the addition of Rs. 25,37,255/- on account of hostel surplus fee receipts by treating it as business income in the hands of the assessee u/s. 11(4)/11(4A) and that too by recording incorrect facts and findings and without observing the principles of natural justice.
He further stated that the lower authorities confirmed the disallowance of depreciation Rs. 1,01,41,449/- without properly appreciating the law on the issue and arguments put forward by the assessee including the one that where there are two views than the one which is favour to assessee shall prevail. Hence, he 3 requested that disallowance in dispute may be deleted. In support of his contention, he relied upon the decision of the Hon’ble High Court in the case of Director of Income Tax (Exemption) vs. Indraprastha Cancer Society reported in [2015] 53 taxmann.com 463 (Delhi) and stated that the present issue in dispute is squarely by the aforesaid decision of the Hon’ble Delhi High Court.
On the other hand, Ld. DR relied upon the orders of the authorities below and stated that the same may be affirmed.
I have heard both the parties and perused the records especially the order of the Ld. CIT(A) and the order of the Hon’ble High Court of Delhi in the case of Director of Income Tax (Exemption) vs. Indraprastha Cancer Society reported in [2015] 53 taxmann.com 463 (Delhi), wherein the Hon’ble Delhi High Court has held that where a charitable institution, which has purchased capital assets and treated amount spent on purchase of capital asset as application of income, is entitled to claim depreciation on same capital asset utilized for business.
After perusing the aforesaid decision of the Hon’ble High Court as aforesaid, I am of the considered view that the issue in dispute is similar and squarely covered by the aforesaid decision, therefore, respectfully following the above precedents, the additions in dispute are hereby deleted and accordingly, the issues in dispute are allowed.
In the result, the appeal of the assessee stands allowed.
The order pronounced in the Open Court on 15-2-2017.