Case Law Details

Case Name : Income tax Officer-(E) I (1),Mumbai Vs Bai Kabibai & Hansraj Morarji Charity Trust (ITAT Mumbai)
Appeal Number : ITA No.5842/Mum/2011
Date of Judgement/Order : 16/06/2015
Related Assessment Year : 2008-09
Courts : All ITAT (4340) ITAT Mumbai (1440)

BRIEF FACTS OF THE CASE AND QUESTION OF LAW

Brief Facts:

This is an appeal filed by assessee against challenging the order dt.8.5.2011 of CIT (A)-I, Mumbai, for the assessment year 2008-2009.The grounds of assessee were as follows:

(i) the Learned Commissioner of Income Tax (Appeals) erred in directing the Assessing Officer to allow depreciation on fixed assets without appreciating the fact that the capital expenditure incurred on acquiring the assets has already been claimed as application of income u/s. 11 of the I. T.Act 1961 in the current / past years.

(ii) The Learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that allowing of depreciation will result in double deduction, which is contrary to the ratio laid down by the Hon’ble Supreme Court in the case of Escorts Ltd. v/s. Union of India 199 ITR 43 and J.K.Synthetics v/s. Union of India (1920 65 TAXMAN 420.)

(iii) the Learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that the deficit arises out of expenditure out of income on which exemption has already been claimed and allowing of set off of deficit of earlier year against income of the current year will result in double deduction, which is contrary to the ratio laid down by the Hon’ble Supreme Court in the case of Escorts Ltd vs. UOI 199 ITR 43 and J.K. Synthetics v/s. Union of India (1992) 65 TAXMAN 420.

Question of Law:

Whether Learned Commissioner of Income Tax (Appeals) erred in directing the Assessing Officer to allow depreciation on fixed assets without appreciating the fact that the capital expenditure incurred on acquiring the assets has already been claimed as application of income u/s. 11 of the I. T. Act 1961 in the current / past years.

CONTENTION OF THE REVENUE

The Revenue relied on the order passed by the Assessing Officer and further contended that the allowing of depreciation will result in double deduction.

CONTENTION OF THE ASSESSEE

The Assessee was of the contention that in the earlier year’s identical issue has been decided in favour of the assessee by the Tribunal. It was also contended that the Hon’ble Bombay High Court had also decided the issue in favour of the assessee for the assessment year 2007-08. The Assessee reproduced the order of the Tribunal for the AY 2009-10 (ITA No.5312/Mum/2012 dt.12.3.15) which stated as follows:

“2. At the outset, it may be noticed that the learned CIT (A) followed the decision , of Hon’ble Bombay High Court in assessee’s own case for A.Y. 2003-04 in holding that the assessee is entitled to depreciation and does not amount to double deduction. Para 3.3 in this regard read as under:-

“3.3 I have carefully considered the facts of the case, submission of the appellant and assessment order. I find that the appellant has taken up the matter for A. Y.2003-04 in writ before the Hon’ble Bombay High Court who has allowed the writ not only on issue of notice u/s. 148 for reopening the assessment, but also on the issue of allowing depreciation for computing application of income and confirmed the decision in the case of CIT vs. Institute Of Banking Personnel reported in 264 ITR 110.Respectfully following the. decision of Bombay High Court in the appellant’s own case for A. Y.2003-04 vide writ petition No.55 of 2011, the A.D. is directed to allow depreciation claimed by the appellant. Ground No. 1 is allowed ….

The assessee also submitted a copy of the order of Hon’ble High Court and also the decision of the ITAT in assessee’s own case for A.Y. 2007-08 (ITA No.2019/Mum/2011 dated 13.1.2015) wherein identical issues were decided in favour of the assessee.

HELD BY ITAT, MUMBAI

The question of law framed in this appeal was answered in terms of the law declared by the Hon’ble High Court and against the Revenue. Since the views taken by the learned CIT (A) are in consonance with the view taken by the ITAT and Hon’ble High Court and held that it did not find any infirmity in the order passed by the learned CIT (A) and dismiss the appeal filed by the Revenue.

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More Under Income Tax

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Category : Income Tax (25341)
Type : Judiciary (10113)
Tags : Bhuvaneswari.S (13) ITAT Judgments (4520) section 11 (98)

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