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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
All the appeals of the Revenue are directed against the common order passed by the Commissioner of Income Tax (Appeals)-17, Chennai, dated 30.03.2016, for the assessment years 2010-11 to 2012-13. The assessee has also filed cross-objections against the very same order of the CIT(Appeals). Therefore, we heard both the appeals and cross-objections together and disposing of the same by this common order.
The only issue arises in all the appeals of the Revenue is with regard to claim of exemption under Section 11 of the Income- tax Act, 1961 (in short 'the Act'). The Assessing Officer disallowed the claim of the assessee for exemption under Section11 of the Act on the ground that the assessee has collected subscription fee annually and also collected life membership fee. The Assessing Officer also found that the activities of the assessee are commercial in nature, hence, proviso to Section 2(15) of the Act would come into operation. This issue was examined by this Tribunal in the assessee's own case for the assessment year 2009-10 in I.T.A.
No.712/Mds/2014 dated 14.01.2016. In fact, the CIT(Appeals), after reproducing the order of this Tribunal for the assessment year 2009- 10, allowed the claim of the assessee under Section 11 of the Act.
This Tribunal has taken a similar view in the case of Tamil Nadu Cricket Association v. DIT(E) 42 ITR(Trib) 546. In view of the above, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
The cross-objections of the assessee is only in respect of depreciation on the assets and the cost of which was allowed as application of income under Section 11 of the Act. In fact, this was also elaborately examined by this Tribunal in the case of Tamil Nadu Cricket Association (supra) and observed at para 12 of its order as follows:-
“12. Apart from that, when the assessee claims the cost of the capital expenditure as exemption under Section 11 of the Act, then the cost of the capital asset becomes NIL. Admittedly, depreciation under Section 32 of the Act has to be allowed only on written down value of the asset. When the written down value of the asset becomes NIL since the entire cost was allowed as application of income under Section 11 of the Act, this Tribunal is of the considered opinion that there cannot be any further claim for deduction under Section 32 of the Act. In view of the above, this Tribunal is of the considered opinion that the assessee is not eligible for deduction under Section 32 of the Act towards depreciation. However, it is made clear that the assessee is eligible for exemption under Section 11 of the Act for all the assessment years under consideration.”
A similar view was also taken by this Tribunal in the case of Music Academy Madras v. DDIT(E) in dated 22/4/2016. Since exemption under Section 11 of the Act falls under Chapter III of the Act, the same would override the provisions of Section 32 which falls under Chapter IV of the Act. In view of the above, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, both, the appeals of the Revenue as well as the cross-objections of the assessee are dismissed.
Order pronounced on 13th April, 2017 at Chennai.