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Sangam Educational Society, C/O Akhilesh Kumar, Advocate Versus Addl. CIT, Range-1, Ghaziabad

Depreciation is allowable expenditure to assessee trust - double deduction - Held that:- A charitable institution, which has purchased capital assets and treated amount spent on purchase of capital asset as application of income, is entitled to claim depreciation on same capital asset utilized for business. See Indraprastha Cancer Society case [2014 (11) TMI 733 - DELHI HIGH COURT] - Decided in favour of assessee. - ITA No. 4749/Del/2015 - Dated:- 1-9-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND .....

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y erred in confirming the disallowance of depreciation ₹ 17,69,550/- without properly appreciating the law on the issue including the one that where there are two views than the one which is favorable to assessee shall apply. 3. Because, learned Commissioner of Income tax (Appeals) further erred in holding the issue as academic is as much as that such disallowance is specifically considered for penalty u/s 271(1)(C) beside other impacts and arguments put forward by the assessee. 4. Because .....

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hout prejudice to above and only as an alternative and without dilution to above prayer, it is also prayed alternatively said disallowance may kindly be restricted to ₹ 11,46,592/-. 2. The brief facts of the case are that the assessee-society filed its return of income on 05.10.2010 declaring NIL income. The case of the assesssee was selected under compulsory scrutiny. The notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred as the Act) dated 20.9.2011 and notice u/s. 142(1 .....

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test checked randomly. The society has been registered under the Societies Registration Act, vide registration no. 1028/2001-021 dated 26.12.2001 and renewed subsequently. As per the memorandum filed, the society was established with, the aim to impart education and other charitable activities covered u/s 2(15) of the LT. Act. Society is running a Professional cum Law College at Ghaziabad. Certificate of registration u/s 12AA of the 1. T. Act, 1961 has been granted by the Commissioner of Income .....

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aimed by the assessee cannot be allowed. In this regard the authorized representative was asked to explain as to why depreciation should not be disallowed. In compliance to above the authorized representative vide his letter dated 22.01.2013 submitted his detailed note with mentioning of section 11(1)(a) and also attended that even if the depreciation is disallowed even then there is excess utilization of funds available during current year. The AO after considering all the documents and evidenc .....

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h the society has been formed i.e. charitable activities as per section 2(15) of the I.T. Act and accordingly, the exemption claimed uls 11(1) was allowed as claimed by the society. During the course of assessment proceedings assessee filed details from time to time as required in the questionnaire which has been verified and test checked randomly. Since nothing adverse has been noted and in view of the provisions of section 11 and 12 of the IT Act, the returned income was accepted and income of .....

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hed the copy of Audit Report /Audited Financial Statements for AY 2010- 11; Copy of order of CIT(A) for AY 2012-13; copy of order of Hon ble Delhi High Court in the case of Indraprastha Cancer Society 53 taxmann.com 463; copy of decision of ITAT, H-Bench, New Delhi in the case of DDIT vs. Bhardwaj Welfare Trust (2015) 59 taxmann.com 201 (Delhi - H Bench); Copy of ITAT, G Bench, New Delhi in the case of Kesar Charitable Trust passed in ITA No. 5632/2015, order dated 5.4.2016 and stated that the i .....

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of appeal and also copy of the decisions cited by the Ld. Counsel of the assessee attached with the Paper Book. 6.1 We find that on similar and identical issue, the Hon ble High Court of Delhi in the case of Indraprastha Cancer Society (Supra) has observed as under (Head Notes only):- Section 32, read with section 11, of the Income Tax Act, 1961 - Depreciation - Allowance / rate of (in case of Trust) - Whether a charitable institution, which has purchased capital assets and treated amount spent .....

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tion) vs. Indraprastha Cancer Society (2015) 53 taxmann.com 463 (Del) wherein similar question arose i.e. whether a charitable institution, which had purchased capital assets and treated the amount spent on purchase of capital assets as application of income, is entitled to claim depreciation on the same capital asset utilized for business. In the said case also the Revenue contention was that this would amount to double taxation and had heavily relied on the judgment of the Hon'ble Supreme .....

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