TMI Blog2019 (4) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to earlier assessment years not showing any such disallowance. The Revenue fails to rebut all these findings with the help of any cogent evidence on record. Addition on account of capital expenditure - amount utilized for Requiring Fixed assets - HELD THAT:- As decided in assessee's own case [2017 (9) TMI 965 - ITAT AHMEDABAD] higher authorities that the amount utilized for Requiring Fixed assets is allowable as application of income as per sec. 11(1)(a) of the Act. There are two separate issues one is pertaining to application of income and other is computation of income. In application of income of trust, amount applied for acquiring fixed assets is considered as eligible, therefore this ground of appeal is allowed and AO is directed to allow amount of investment in the fixed assets as part of application of income as per sec. 11(1)(a) - Revenue appeal dismissed. - ITA No. 3041/Ahd/2016 - - - Dated:- 29-3-2019 - Shri Waseem Ahmed, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri Ramesh Chandra Pandey, CIT-DR For the Respondent : Shri Alog Saiyed, AR ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fixed assets and the depreciation. Therefore the AO disallowed the amount of depreciation of ₹ 3,51,79,106 and added to the total income of the assessee. 5. The aggrieved assessee preferred an appeal to learned CIT (A) who has deleted the addition made by the AO. 6. Being aggrieved by the order of learned CIT (A), the Revenue is in appeal before us. 7. The learned DR and the learned AR before us relied on the order of authorities below as favorable to them. 8. We have heard the rival contentions and perused the materials available on record. At the outset, we note that the tribunal in the own case of the assessee bearing ITA No. 92/AHD/2014 pertaining to the assessment year 2010-11 decided the issue against the Revenue and in favor of the assessee vide order dated 14-9-2017. The relevant extract of the order is extracted below. 14. The Revenue s last substantive ground pleads that the CIT(A) has erred on facts and in law in reversing Assessing Officer s action disallowing depreciation of ₹ 133,60,206/- made on the ground that the assessee could not have claimed the corresponding sums spent on acquisition of fixed assets for the purpose of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The Revenue s fifth substantive ground seeks to revive Assessing Officer s action treating development fund amount of ₹ 32,69,000/- as assessee s taxable income. We notice herein as well that the Assessing Officer made the impugned addition in page 8 without discussing anything on merits. The CIT(A) on the other hand decides the issue in assessee s favour as under: 10. I have considered the facts of the case, assessment order and the submission made by the Appellant. The A.O. has nowhere in his order discussed the reasons as to why the said addition of ₹ 32,69,000/- is made. It is seen that the above figure appears in the balance sheet as addition to Development Fund and the A.O. has considered the said Development Fund as income because he has treated the Trust as AOP. As I have already decided the status of the appellant as 'Registered Trust' as per sec. 11 and 12 of the Act in Ground No. 1, 2 3 (supra). Therefore, this addition does not survive. Even otherwise, on the merits as submitted in the written submission, the Appellant has received the said Development Fund and also used for the purpose for which it was receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in the own case of the assessee bearing ITA No. 92/AHD/2014 pertaining to the assessment year 2010-11 decided the issue against the Revenue and in favor of the assessee vide order dated 14-9-2017. The relevant extract of the order is extracted below. 6. We have heard both the parties strongly reiterating their respective stands. Case file indicates that the Assessing Officer admittedly did not draw any comparative chart or verification between the impugned payments vis- -vis their market rate of rent in question. The CIT(A) on the other hand has taken into account an approved valuer s report as well as all corresponding documents indicating all relevant particulars indicating the assessee to be utilizing vacant space alongwith land and building whilst concluding that the payments in question cannot be held as excessive ones. It has further come on record that the assessee had been paying similar rents in preceding assessment years as well. It places on record assessment order(s) pertaining to earlier assessment years not showing any such disallowance. The Revenue fails to rebut all these findings with the help of any cogent evidence on record. We therefore aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as concluded that when the principal amount was applied for acquiring assets, it was treated as applied for charitable purpose and entire amount was claimed u/s. 11. The A.O. has not considered that there are two separate issues i.e. one is application of income, and second is computation of income. So far as application of income is concerned, amount applied for acquiring fixed assets is covered u/s. 11(1)(a) and the same is allowable as income applied for charitable or religious purpose, and the second is allowability of depreciation in computation of income. I have considered various judgments cited by the appellant and as held by the Hon'ble Supreme Court in the case of S.RM.M.CT.M Tiruppani Trust v. CIT [1998] 230 ITR 636 and CIT v. Tiny tots Education Society 330 ITR 21 (P H) as well as the decision of the Gujarat High Court in the case of Satya Vijay Patel Hindu Dharmashala Trust v. CIT 86 ITR 683 wherein it has been Held that the amount spent by the trustee in the construction of the new dharamshala was an application of income towards the charitable purposes of the trust . In all the judgments it has been held by the higher authorities that the amount utilized for Req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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