ITO (E) 2(1), MUMBAI vs. MANDAR EDUCATION SOCIETY, MUMBAI

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ITA 5341/MUM/2015Status: DisposedITAT Mumbai13 October 2017AY 2011-123 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 followed its own previous order and decisions of the Bombay High Court and Punjab & Haryana High Court. It held that depreciation should be allowed on assets even if their capital expenditure was claimed as application of income in earlier years.

What were the facts?

The assessee, a charitable trust running educational institutions, filed a Nil income return. The Assessing Officer disallowed depreciation on assets whose capital expenditure was already claimed as application of income, assessing total income at Rs. 1,53,19,080.

What were the issues?

The primary issue was whether depreciation could be claimed on assets when their capital expenditure had already been treated as application of income. The secondary issue was the correctness of the disallowance made by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 143(2),Section 142(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI

Before: SHRI D.T. GARASIA & SHRI MANOJ KUMAR AGGARWAL

For Respondent: Shri Suman Kumar, D.R
Hearing: 17.08.2017Pronounced: 13.10.2017

Per D.T. GARASIA, Judicial Member:

1.

The present appeal has been preferred by the Revenue against the order dated 25.08.2015 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2011-12.

2.

The short facts of the case are that the assessee is a charitable trust for advancement of education among the children of residents of Taluka Clilpiun, Dist. Ratnagiri and those residing in adjoining

2 M/s. Mandar Education Society rural areas in general. The assessee trust also conducts schools and colleges including colleges of Engineering, Pharmacy, Management and Industrial Training Centre. It filed the return of income for A.Y. 2011-12 on 29/09/2011 showing Nil income. The trust is registered as a charitable organization with DIT (E), Mumbai u/s 12A(a) vide registration No. INS/24140 dated 30.10.1984 and registered with Charity Commissioner, Mumbai vide registration No.F-9792 (Mum). The return was processed u/s 143(1). The case was selected for scrutiny and notices u/s 143(2) and 142(1) were issued. The assessment was completed u/s 143(3) on 22.01.2014 determining total income at Rs.1,53,19,080/- by disallowing depreciation of Rs.1,55,19,614/- in respect of the assets, the capital expenditure of which has already been claimed and allowed as application of income in the current or earlier years.

3.

Matter carried to the Ld. CIT(A) and the Ld. CIT(A) has allowed the appeals observing as under: 5. I have carefully considered the facts of the case and the submission of the AR. I have also gone through the decisions relied on by the appellant. On identical issue, the appeal for the A.Y. 2008-09 was decided in favour of the appellant by the Hon'ble Tribunal vide its order No.3656/Mum/2013 dated 07.05.2015. While deciding the issue, the Hon'ble ITAT has relied on the decision of Hon'ble Bombay High Court in the case of CIT v. Institute of Banking Personnel Services, 264 ITR 110 (Born) and CIT vs. Market Committee Peepli, 330 ITR 16 (P & H). Hence respectfully following the decision of the ITAT in assessee's own case, the AO is directed to allow the claim of depreciation in respect of the impugned assets for the A.Y.2011- 12. 6. In the result, the appeal is allowed.”

4.

None appeared on behalf of the assessee. We find that similar addition has been deleted by ITAT in assessee’s own case in ITA

3 M/s. Mandar Education Society No.3656/M/2013 for A.Y. 2008-09 vide order dated 07.05.2015. Respectfully following the order of the Tribunal, we decide this appeal in favour of the assessee.

5.

In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on 13.10.2017.

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