2018 (1) TMI 606 - HC - Income Tax

Claim of depreciation by assessee trust - ITAT allowed the claim - Held that - The facts of the case are that the respondent-assessee is engaged in imparting education and educational activities and is currently educational institute by the name of Mahatma Jyoti Rao Phule. The respondent-assessee was granted education vide order dated 8.8.2014 with effect from 26.3.2014. Hence, the assessee claimed exemption u/s 10, 11 & 12 of the Act. However, the AO in re-assessment proceedings disallowed the claim of assessee s exemption u/s 11 and consequential issues related to tax on account of disallowance of benefit u/s 12AA and further deleted the claim of depreciation. We have gone through the judgment of CIT(A) & ITAT. We are in complete agreement with the view taken by the Tribunal. No substantial questions of law arises.

Summary

Issues:
- Appeal challenging Tribunal's judgment and order
- Substantial questions of law regarding depreciation for charitable institutions
- Disallowance of depreciation and interest charged on trust fund balances

Analysis:
The case involved an appeal challenging the judgment and order of the Tribunal regarding the allowance of appeals for both the department and the assessee for statistical purposes. The appellant raised substantial questions of law related to the treatment of depreciation for charitable institutions. The questions included the eligibility of charitable institutions for depreciation, the consideration of depreciation and application of income separately, and the issue of double deduction. The appellant also questioned the dismissal of the appeal by the revenue on the disallowance of depreciation, citing a Supreme Court decision on the matter. Another issue raised was the deletion of interest charged on trust fund balances under section 13(3) of the Income Tax Act, 1961.

The respondent-assessee, an educational institute, claimed exemption under sections 10, 11, and 12 of the Act. However, the Assessing Officer disallowed the exemption under section 11 and deleted the claim of depreciation in the reassessment proceedings. The High Court reviewed the judgments of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT) and found no substantial questions of law to arise. Consequently, the appeals were dismissed, upholding the decision of the Tribunal.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing that no substantial questions of law were found in the case. The issues raised regarding depreciation for charitable institutions and the disallowance of depreciation were addressed, leading to the dismissal of the appeals. The judgment highlighted the importance of separate provisions governing charitable institutions and the application of income, ultimately supporting the Tribunal's decision in the matter.