Case Law Details

Case Name : Asstt. Director of Income Tax (E) Vs International Goudiya Vedanta Trust (ITAT Delhi)
Appeal Number : ITA No. 2920/DEL/2011
Date of Judgement/Order : 21/12/2011
Related Assessment Year : 2008- 09
Courts : All ITAT (5374) ITAT Delhi (1224)

ADIT (E) Vs International Goudiya Vedanta  Trust (ITAT Delhi)- The Hon’ble Punjab & Haryana High Court in the case of CIT vs Tiny Tots Education Society (supra) has held that the income of the assessee, being exempt, the assessee was only claiming that depreciation should be reduced from the income for determining percentage of funds which had to be applied for the purposes of the Trust and as such, it could not be held that double benefit was given in allowing the claim for depreciation for computing the income for purposes of Section 11 of the Act. Respectfully following the aforesaid decision of Hon’ble Punjab & Haryana High Court, we uphold the order of ld. CIT(A) and direct the AO to allow depreciation and reduce the same from the income of the trust for determining the percentage of funds which had to be applied for the purposes of the Trust. The order of the ld. CIT(A) is thus upheld.

O R D E R

PER C. L. SETHI, J.M.

The only ground raised by the revenue in this appeal, directed against the order dated 11.4.2011 passed by the learned CIT(A) for Asstt. Year 2008-09, is as under:-

“On the facts and in the circumstances of the case, the ld. CIT(A) has erred in allowing depreciation which the AO had added back to the tune of  Rs. 31,03,118/- as the same was already allowed as application of income under the head Capital Expenditure”.

2. The assessee is a public charitable trust. It is registered u/s 12A(a) of the Income Tax Act. Its income is eligible for exemption u/s 11 of the Act subject to the conditions specified therein. In the income and expenditure account submitted by the assessee, the assessee claimed deduction on account of depreciation of  Rs. 31,03,118/-, which has been disallowed by the Assessing Officer by observing that the same is not allowable while determining the surplus of the income of the assessee after considering various revenue expenditure without depreciation, capital expenditure applied to the objects of the Trust and the amount set apart u/s 11 subsection( 2) of the Act.

3. On appeal, the ld. CIT(A) has taken the view that in the light of the decision of Hon’ble Punjab & Haryana High Court in the case of CIT vs M/s Tiny Tots Education Society 330 ITR 21(P&H), the assessee’s claim of depreciation on capital assets is to be allowed as a deduction from the total income of the Trust.

4. Hence, the revenue is in appeal before us.

5. We have heard both the parties and perused the material on record. The Hon’ble Punjab & Haryana High Court in the case of CIT vs Tiny Tots Education Society (supra) has held that the income of the assessee, being exempt, the assessee was only claiming that depreciation should be reduced from the income for determining percentage of funds which had to be applied for the purposes of the Trust and as such, it could not be held that double benefit was given in allowing the claim for depreciation for computing the income for purposes of Section 11 of the Act. Respectfully following the aforesaid decision of Hon’ble Punjab & Haryana High Court, we uphold the order of ld. CIT(A) and direct the AO to allow depreciation and reduce the same from the income of the trust for determining the percentage of funds which had to be applied for the purposes of the Trust. The order of the ld. CIT(A) is thus upheld.

6. In the result, the appeal filed by the revenue is dismissed.

Order was pronounced in the open court on 21st December, 2011, immediately after the hearing was over.

Download Judgment/Order

More Under Income Tax

Posted Under

Category : Income Tax (28056)
Type : Judiciary (12274)
Tags : ITAT Judgments (5554) section 11 (126)

Leave a Reply

Your email address will not be published. Required fields are marked *