DCIT (E) 2(1), NAVI MUMBAI vs. THE SANTACRUZ RESIDENT ASSOCIATION, MUMBAI

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ITA 6637/MUM/2016Status: DisposedITAT Mumbai20 April 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 the jurisdictional High Court's decision in CIT vs. Institute of Banking Personnel Selection, which allowed depreciation. It found no infirmity in the CIT(A)'s order allowing the claim.

What were the facts?

The Revenue appealed the CIT(A)'s decision to allow depreciation on capital assets to a charitable trust. The Assessing Officer had disallowed this claim, considering it a double deduction.

What were the issues?

Whether a charitable trust is eligible to claim depreciation on its capital assets. Whether allowing depreciation on capital assets constitutes a double deduction.

Which sections of the Income-tax Act were involved?

Section 12A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI

Before: SHRI R.C.SHARMA, AM SMT

For Appellant: Shri Ganesh Iyer
For Respondent: Ms. Beena Santosh, Shri Ganesh Iyer
Hearing: 20/04/2017Pronounced: 20/04/2017

आदेश / O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the Revenue against the order of CIT(A)- 1, Mumbai dated 24/08/2016 for the A.Y.2011-12 in the matter of allowing claim of depreciation on fixed assets in the hands of Assessee-Trust. 2. Rival contentions have been heard and record perused. 3. Facts in brief are that the Assessee is a Charitable Trust Registered u/s.12A of the Income Tax Act and filed its return of income on 30/12/2011 alongwith the Income and expenditure account, balance sheet and audit report in Form 10B declaring deficit of Rs.1,59,12,890/-. The assessment order completed u/s.143(3) the Act on 15/01/2014 determining the total income at Rs. Nil/- by disallowing claim in respect of the Depreciation on capital assets Rs.63,66,643/-.

1.

The Santacruz Residents Association 4. Assessee’s claim of depreciation was allowed by CIT(A) after observing as under:- “ I have considered the contention of the Assessee and also the ratio of jurisdictional High Court in the matter of CIT v/s. Institute of Banking Personal Selection as reported in 264 ITR 110 (Bom). However, the Hon’ble Apex Court in 199 ITR 43 Union of India v/s. Escorts Limited has held that double deduction cannot be allowed under any circumstances. It may also be pertinent to mention that the ratio of 264 ITR 110 (Bom) was pronounced by the Hon’ble Jurisdictional High Court without taking into consideration the ratio of Hon’ble Apex Court in 199 ITR 43. It may also be further pertinent to mention that the jurisdiction in the 264 ITR 110 (Bom) was accepted by the Department in view of low tax effect involved and not in view of the merits of the case. Therefore, relying on the ratio of the Apex Court in 199 ITR 43 Escorts Limited, since the claim of depreciation of Rs.63,66,643/- amounts to double deduction, the same is allowed.”

5.

The issue in question is squarely covered by the decision of Bombay High Court in case of Institute of Banking Personnel Selection 264 ITR 110. Respectfully following the same, I do not find any infirmity in the order of CIT(A) for allowing assessee’s claim of depreciation.

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