Indian Institute of Information Technology Society Vadodara Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad restores ₹26.84 lakh depreciation disallowance for IIIT Society, directs AO to verify if asset cost was claimed as application of income.
Ahmedabad: The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, has remitted the case of Indian Institute of Information Technology (IIIT) Society Vadodara back to the Assessing Officer (AO) for fresh examination regarding the disallowance of depreciation amounting to ₹26,84,786/-. The Tribunal’s decision came after it found that the Commissioner of Income Tax (Appeals) [CIT(A)] had confirmed the disallowance without verifying the assessee’s crucial contention that the cost of acquiring the assets on which depreciation was claimed had not been treated as an application of income under Section 11 of the Income Tax Act, 1961.
The case pertains to the Assessment Year (AY) 2017-18. The assessee, Indian Institute of Information Technology Society Vadodara, is an institution established in 2013 under the Public-Private-Partnership (PPP) model by the Ministry of Human Resource Development (MHRD), Government of India. As a society established for educational purposes, its income is potentially eligible for exemption under Section 11 of the Income Tax Act, provided it applies its income for charitable purposes.
During the assessment proceedings for AY 2017-18, the Assessing Officer made an addition of ₹26,84,786/- to the assessee’s income. This addition resulted from the disallowance of depreciation claimed by the assessee on its fixed assets. The basis for this disallowance by the AO was Section 11(6) of the Income Tax Act.
