Madras High Court
The Commissioner Of Income Tax vs Unknown on 8 April, 2021
T.C.A.No. 407 of 2014
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 08.04.2021
CORAM:
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R.HEMALATHA
T.C.A.No. 407 of 2014
The Commissioner of Income Tax,
Coimbatore. ... Appellant
v.
M/s. Kovai Medical Centre and Educational Trust,
KMCH Campus,
Avinashi Road,
Coimbatore - 641 011. ... Respondent
Appeal preferred under Section 260A of the Income Tax Act, 1961,
against the order of the Income Tax Appellate Tribunal, Madras, "C"
Bench, dated 07.10.2013 in I.T.A.No.1772/Mds/2012 for the Assessment
Year 2009-2010.
For Appellant : Mr.J. Narayanaswamy
Senior Standing Counsel
For Respondent : No Appearance
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T.C.A.No. 407 of 2014
JUDGMENT
(Judgment was delivered by M. DURAISWAMY, J.)
Challenging the order passed in I.T.A.No.1772/Mds/2012 in
respect of the Assessment Year 2009-2010 on the file of the Income Tax
Appellate Tribunal, Chennai,"C" Bench (for brevity, the Tribunal), the
Revenue has filed the above appeal.
2. The respondent-assessee is a Charitable Trust registered under
section 12A of the Income Tax Act, 1961. The assessee filed its return of
income for the Assessment Year 2009-2010 on 28.08.2009. The
Assessing Officer issued a notice under section 143(2) of the Act on
13.12.2011. While concluding the assessment, the Assessing Officer
inter alia held that the depreciation claimed by the assessee would not
be allowable as a deduction in the computation of the funds available for
application by the assessee on the premise that the entire cost of the
assets were allowed as an application of the funds in the year when the
same were purchased. The Assessing Officer also held that the
provisions of section 11 is distinct from that of section 14 and that the
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T.C.A.No. 407 of 2014
deductions and allowances that are provided in Chapter V cannot be
applied in determining the income for the purpose of section 11 of the
Act. Aggrieved over the order passed by the Assessing Officer, the
assessee preferred an appeal before the Commissioner of Income
Tax(Appeals), who allowed the appeal in favour of the assessee and held
that the depreciation is to be deducted in arriving at the total income of
the assessee. Aggrieved by the order of CIT (Appeals), the Revenue filed
an appeal before the Income Tax Appellate Tribunal and the Tribunal,
dismissed the appeal. Challenging the order passed by the Income Tax
Appellate Tribunal, the Revenue has filed the above appeal.
3. The above appeal was admitted on the following substantial
questions of law:
“ (i) Whether in law and in the facts and
circumstances of the case, the Tribunal is right in
holding that depreciation is allowable as
application of income on charitable objects?
(ii) Whether on the facts and in the
circumstances of the case, the Tribunal was right
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T.C.A.No. 407 of 2014
in holding that the assessee is entitled to claim
depreciation on the assets, in the form of
application of income, even though cost of purchase
of asset was treated as application of income under
section 11?
(iii) Whether in law and in the facts and in the
circumstances of the case, the Tribunal is right in
holding that allowing the depreciation claim of the
assessee would not result in double deduction,
though the entire costs of the depreciable assets
have already been allowed as as application of
income towards objects of the trust?"
3. .When the appeal is taken up for hearing, Mr.J.Narayanasamy,
learned Senior Standing Counsel appearing for the appellant-revenue
fairly submitted that the substantial questions of law that are raised in
the above appeal were already decided by the Division Bench of this
court in the Common Judgment in T.C.A.Nos.343 to 345 & 347 of 2014
[Commissioner of Income Tax, Trichy Vs. M/s.National College
Council, Teppakulam, Tiruchirapalli – 620 002] wherein the Division
Bench held as follows:-
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T.C.A.No. 407 of 2014
" ................. 4.When the appeals were taken up for
hearing, Mr.J.Narayanasamy, learned Senior Standing
Counsel appearing for the appellant – Revenue in all the
appeals, fairly submitted that the substantial question of law,
which has been framed in these appeals, have been answered
against the Revenue by the Hon'ble Supreme Court in CIT
Vs. Rajasthan and Gujarati Charitable Foundation
reported in [2018] 402 ITR 441 (SC). Further, the learned
Senior Standing Counsel submitted that following the
decision of the Hon'ble Supreme Court, the Hon'ble Division
Bench of this Court, by judgment dated 26.08.2019, made in
T.C.A.Nos.680 & 681 of 2011 [Commissioner of Income
Tax – I, Tiruchirapalli Vs. M/s.National College Council,
P.B.No.369, Chatram Bus Stand, Teppakulam,
Tiruchirapalli – 620 002] dismissed the appeals and
answered the substantial questions of law against the
Revenue. The appeals in T.C.A.Nos.680 & 681 of 2011
relates to the very same assessee. Hence, following the
judgment of the Hon'ble Supreme Court reported in [2018]
402 ITR 441 (SC) and the judgment of the Hon'ble Division
Bench of this Court made in T.C.A.Nos.680 & 681 of 2011,
the substantial question of law is answered against the
Revenue and the appeals are dismissed. No costs.
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T.C.A.No. 407 of 2014
5. In view of the fair submission made by the learned Senior
Standing Counsel, following the Judgment dated 26.02.2021 made in
T.C.A.Nos.343 to 345 & 347 of 2014 [cited supra], the questions of law
are answered against the Revenue and the Tax Case Appeal is
dismissed. No costs.
[M.D., J.] [R.H., J.]
08.04.2021
Index : Yes/No
Internet : Yes
Rj
To
The Income Tax Appellate Tribunal,
Chennai, "C" Bench
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T.C.A.No. 407 of 2014
M. DURAISWAMY, J.
and
R.HEMALATHA, J.
Rj
T.C.A.No. 407 of 2014
08.04.2021
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