2015 (11) TMI 1851 - AT - Income Tax

Disallowance on account of depreciation to assessee trust - assessment of trust - HELD THAT - CIT(A) has relied upon various judgments which is in favour of the Revenue. Similarly, the Ld. Counsel for the assessee has also relied upon various judgment including the judgment of the Hon ble Delhi High Cour which are decided in favour of the assessee. No decision, direct on the point, of Hon ble Jurisdictional High court has been brought to my notice. Keeping in view of the facts and circumstances of the present case and the judgment cited by both the parties which are in favour of the assessee as well as in favour of the Revenue also, we refer the Hon ble Apex Court decision in the case of M/s Vegetable Products Ltd. 1973 (1) TMI 1 - SUPREME COURT , wherein it has been held that in the taxing provision if two constructions are possible, one favouring assessee should be adopted. Respectfully following the above precedent, decide this issue in favour of the assessee and against the revenue and accordingly delete the addition in dispute and decide the ground no. 2 in favour of the assessee. Not allowing the exemption u/s. 10(23C)(iiiae) - HELD THAT - As per the AO, the assessee has not filed any documentary evidence before the lower authorities. But before me the assessee has filed a Paper Book for substantiating his claim having copy of assessee s reply dated 17.12.2012 filed to the AO; copy of assessee s reply dated 8.1.2013 filed to the AO alongwith annexures; copy of assessee s reply dated 22.1.2013 filed to the AO; copy of assessee s submissions dated 9.1.2015 filed before the Ld. CIT(A) and copy of assessee s submissions dated 30.4.2015 filed before the Ld. CIT(A) which needs to be considered afresh, under the law. Therefore, in the interest of justice, this issue is remitted back to the file of the AO for fresh consideration, after giving adequate opportunity of being heard to the assessee.

Summary

Issues:
1. Calculation of assessed income
2. Disallowance of depreciation
3. Exemption under section 10(23C)(iiiae)
4. Credit of prepaid taxes

Analysis:

Calculation of assessed income:
The appeal was filed against the order of the Ld. CIT(A) for the assessment year 2010-11. The appellant society declared NIL income, but the assessing officer calculated the income at Rs. 7,80,855. The Ld. CIT(A) partly allowed the appeal. The Tribunal heard both parties and reviewed the orders of the revenue authorities. In the absence of a direct decision from the Jurisdictional High Court, the Tribunal referred to the Supreme Court's decision in M/s Vegetable Products Ltd. 88 ITR 192, favoring the assessee in case of ambiguity in taxing provisions. Consequently, the Tribunal decided this issue in favor of the assessee, deleting the disputed addition.

Disallowance of depreciation:
Regarding the disallowance of Rs. 2,25,571 on account of claimed depreciation, the Ld. CIT(A) relied on judgments favoring the revenue, while the assessee cited judgments, including those from the Delhi High Court, in their favor. The Tribunal, following the principle that when two constructions are possible in taxing provisions, the one favoring the assessee should be adopted, decided in favor of the assessee. The addition was deleted, and the ground was decided in favor of the assessee.

Exemption under section 10(23C)(iiiae):
The issue of not allowing the exemption under section 10(23C)(iiiae) was raised. The AO mentioned the lack of documentary evidence from the assessee. However, the assessee submitted a Paper Book during the Tribunal proceedings, which was not considered by the lower authorities. The Tribunal deemed it necessary to remit this issue back to the AO for fresh consideration, ensuring the assessee is provided with adequate opportunity to be heard. The appeal was allowed for statistical purposes.

Credit of prepaid taxes:
The issue of not allowing the credit of prepaid taxes was also raised in the appeal. However, detailed analysis or resolution of this issue was not explicitly provided in the judgment.

In conclusion, the Tribunal's decision favored the assessee on the issues of depreciation and exemption under section 10(23C)(iiiae) while remitting the latter back to the AO for fresh consideration. The appeal was allowed for statistical purposes, with the Tribunal pronouncing the order on 17/11/2015.