2021 (5) TMI 962 - AT - Income Tax

Exemption u/s 11 12 - Charitable activity u/s 2(15) - exemption denied as assessee was involved in trade, commerce or business as there was a restaurant run in the name of Dilli Dastarkhwan in the premises of the assessee and the assessee was receiving income from the restaurant - HELD THAT - We find that the Ld.CIT(A) has followed the decision of the Tribunal pertaining to Assessment Year 2009-10. 2014 (7) TMI 1339 - ITAT DELHI - The Revenue has not brought any other binding precedent into our notice. Therefore, we find that there is no reason to interfere in the findings of Ld.CIT(A). Ground No.1 raised by the Revenue in this appeal is dismissed. Allowance of depreciation on fixed assets - CIT-A allowed deduction - HELD THAT - CIT(A) has followed the judgement of Hon ble Delhi High Court in the case of DIT(Exemption) vs Charanjiv Charitable Trust 2014 (3) TMI 760 - DELHI HIGH COURT and also the judgement in the case of DIT(Exemption) vs Indraprashta Cancer Society 2014 (11) TMI 733 - DELHI HIGH COURT No infirmity in the order of Ld. CIT(A) and same is hereby affirmed. Thus, Ground No.2 of the appeal raised by the Revenue is dismissed.

Summary

Issues:
1. Exemption u/s 11 & 12 of the Income Tax Act, 1961.
2. Claim of depreciation on fixed assets.

Analysis:

Issue 1: Exemption u/s 11 & 12 of the Income Tax Act, 1961:
The appeal was against the order of the CIT(A) for the assessment year 2014-15, where the Revenue challenged the exemption granted under sections 11 and 12 of the Act. The CIT(A) allowed the exemption, following previous decisions and the Tribunal's judgment for the assessment year 2009-10. The Revenue contended that the assessee was involved in business activities, thus not eligible for exemption. However, the CIT(A) upheld the exemption based on consistent decisions in favor of the assessee. The Tribunal affirmed the CIT(A)'s decision, stating that no new binding precedent was presented by the Revenue, leading to the dismissal of Ground No.1 raised by the Revenue.

Issue 2: Claim of Depreciation on Fixed Assets:
The Revenue appealed against the allowance of depreciation on fixed assets by the CIT(A). The Revenue argued that depreciation on assets previously claimed as application of income should not be allowed. The CIT(A) justified the allowance of depreciation citing provisions of the Income Tax Act governing charitable trusts and institutions. The CIT(A) also referred to a judgment by the Delhi High Court in favor of allowing depreciation for charitable institutions. The Tribunal, finding no rebuttal from the Revenue, upheld the CIT(A)'s decision based on the High Court's judgment. Consequently, Ground No.2 raised by the Revenue was dismissed, and the appeal was ultimately rejected.

In conclusion, the Tribunal affirmed the CIT(A)'s decision to allow exemption u/s 11 & 12 and the claim of depreciation on fixed assets, dismissing the Revenue's appeal in its entirety.