TMI Blog2014 (2) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80G (5C) read with explanation 2 read with subsection( 3) of section 12, a situation would arise where if any breach of conditions contained in subsection (5C), the effect thereof would be on the donee trust not fulfilling those conditions - As provided in subsection( 3) of section 12, in terms of clause(1) of explanation 2, it would not have any effect on the deduction to which the assessee is otherwise entitled to on such donation - The tribunal has held in the impugned judgement that if the donor is also taxed (along with taxing the same amount in the hands of donee), there would be a case of double taxation – Decided against Revenue. - Tax Appeal No. 758 of 2013 - - - Dated:- 23-1-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Petitioner : Mr. KM Parikh, Advocate For the Respondent : Ms. SN Soparkar, Sr. Counsel JUDGMENT (Per : Honourable Mr. Justice Akil Kureshi) 1. The Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal ( the tribunal for short) dated 22.3.2013. Following questions have been raised for our consideration : (1) (i) Whether the ITAT was justified in law in allowing depreciation @100% on temporary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land use right given by them temporary fur running Amul Parlour, on which the parlours were constructed by the assessee, which can be any time demolished by them. There is no right created by them as per the terms and conditions of the agreement. By following the decision of Hon ble Madras High Court, the appellant did not have any right on the land of perpetually. Therefore, we reverse the order of the CIT(A). Accordingly the assessee s appeal on this ground in both years is allowed. 5. Having heard the learned counsel for the parties, we have prima facie doubt about such structure qualifying for 100% depreciation. The words used are purely temporary erections such as wooden structures. The question therefore, was whether the parlour was housed in a purely temporary erection. The contention of the assessee that the AUDA could have demolished the structure at any point of time in our opinion would not be germane to decide whether the structure itself was temporary or not since the later portion of the expression used the term such as wooden structure . The Assessing Officer had noted that the structure was a pukka structure without much elaboration. Had this been the sole que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest to revoke this arrangement, it will be entitled to do so without paying any compensation whatsoever in the second part. 17. The party of the second part will not implement any development or construction in the assignment area without taking into confidence of AUDA. 7. Combined reading of the said conditions would establish that the assessee had the right to use the land for putting up its parlours for a period of five years. Thereafter, only upon mutual agreement between the assessee and the AUDA, the period could be extended. During currency of the period of the agreement, the assessee had to maintain the garden and permit full access to the members of the public. The assessee did not have any right to develop any part of the land or put up construction without the permission of AUDA. 8. Such conditions would establish that the assessee had a limited right to use the land for the limited purpose and the limited period. We are informed that in the next year because of non renewal of the agreement, the assessee s structure was demolished. In this context, we may refer to the decision of the Supreme Court in case of Madras Auto Service (P) ltd.(supra). It was a case in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 20022003 made donations to the tune of Rs.5.25 crores to a trust in Kutch Earthquake Relief Fund and claimed deduction under section 80G of the Income Tax Act. Subsequently, it was found that the donee had not made full utilisation of the funds within the time limit set out in the statute nor had transferred the unutilised fund in the Prime Minister s Relief Fund before the time permitted. On such premise, the Assessing Officer disallowed a sum of Rs.4.48 crores, restricting the deduction to Rs.76.95 crores. Ultimately, when the issue reached the tribunal, the tribunal in the impugned judgement held in favour of the assessee basing reliance on explanation 2 to section 80G and further observed that any tax in the hands of assessee donor would amount to double taxation. 12. We notice at the outset that donation was made and the same was deductible under section 80G of the Act. To this there is no dispute. It is also not in dispute that the donee did not utilise the funds or transfer it to the Prime Minister Relief s Fund as provided in subsection (5C) of section 80G. In such a situation, section 12(3) of the Act inserted by the Amending Act 2001 with effect from 3.2.2001 provid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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