Madras High Court
The Commissioner Of Income Tax vs M/S.Coimbatore Welfare ... on 5 July, 2021
T.C.A.No.423 of 2014
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 05.07.2021
CORAM:
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE R.HEMALATHA
T.C.A.No.423 of 2014
The Commissioner of Income Tax,
Coimbatore. ... Appellant
Vs.
M/s.Coimbatore Welfare Association,
Shri Nehru Vidyalaya Campus,
Bhagwan Mahaveer Building,
Robertson Road,
Coimbatore – 641 002. ... 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 20.11.2012 in I.T.A.No.1756/Mds/2013 for the
Assessment Year 2010-11.
For Appellant : Mr.J.Narayanasamy,
Senior Standing Counsel
For Respondent : Mr.M.Kaushik
for Mr.S.Sridhar
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T.C.A.No.423 of 2014
JUDGMENT
(Judgment was delivered by M.DURAISWAMY, J.)
Challenging the order passed in I.TA.No1756/Mds/2013 in respect
of the Assessment Year 2010-11 on the file of the Income Tax Appellate
Tribunal, Chennai, "C" Bench, the Revenue has filed the above appeal.
2.The assessee is a Public Charitable Trust, registered under
Section 12A of the Income Tax Act. The assessee filed its return of
income for the Assessment Year 2010-11 on 18.01.2011, claiming
Rs.2,10,46,625/- as depreciation on assets. The Assessing Officer
disallowed the claim of depreciation on the ground that the entire cost of
assets has already been claimed as application of income towards objects
of the Trust and the claim of the depreciation on the cost of the very same
asset will result in double deduction. The Assessing Officer relying on
the decision of the Apex Court in the case of Commissioner of Income
Tax Vs. Lissie Medical Institutions (348 ITR 344), disallowed the claim
of depreciation made by the assessee, amounting to Rs.2,10,46,625/-.
Aggrieved over the order passed by the Assessing Officer, the assessee
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T.C.A.No.423 of 2014
preferred an appeal before the Commissioner of Income Tax (Appeals),
who allowed the appeal, directing the Assessing Officer to allow the
claim of depreciation. The Commissioner of Income Tax (Appeals) also
observed that it is not only the accounting principle, but even the statute
and judicial interpretation of the provisions provided that in arriving at
the amount of income available for application under Section 11,
depreciation should be deducted. Aggrieved by the order of the
Commissioner of Income Tax (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
question of law:
“1)Whether in law and in the facts and
circumstances of the case, the Income Tax Appellate
Tribunal is right in holding that depreciation is
allowable as application of income on charitable
objects?
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T.C.A.No.423 of 2014
2)Whether on facts and in the circumstances of
the case, the Income Tax Appellate Tribunal was
right 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?
3)Whether in law and in the facts and
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 cost of the depreciable assets have
already been allowed as application of income
towards objects of the Trust?”
4.When the appeal is taken up for hearing, Mr.J.Narayanasamy,
learned senior standing counsel appearing for the appellant–Revenue
fairly submitted 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 dated 26.02.2021 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
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T.C.A.No.423 of 2014
Division Bench held as follows:
“...
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
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T.C.A.No.423 of 2014
Revenue and the appeals are dismissed. No costs.”
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 and T.C.A.Nos.680 & 681 of 2011,
the questions of law are answered against the revenue and the Tax Case
Appeal is dismissed. No costs.
Index : Yes/No [M.D., J.] [R.H., J.]
Internet : Yes 05.07.2021
va
To
1.The Income Tax Appellate Tribunal, Chennai, "C" Bench
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T.C.A.No.423 of 2014
M.DURAISWAMY, J.
and
R.HEMALATHA , J.
va
T.C.A.No.423 of 2014
05.07.2021
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