2023 (7) TMI 1270 - AT - Income Tax

Disallowance of 50% of expenses excluding Travelling and Conveyance - assessee had not produced books of accounts along with original bills and vouchers for examination before the AO during the course of assessment proceedings - CIT(A) deleted the addition - HELD THAT - AO has not made any allegation that amount have been spent for the purposes which are other than for meeting the objections of the trust or are not for charitable purpose. Considering the fact that the assessee has provided the details of the expenses on account of travelling and conveyance before the A.O., we find no error or infirmity in the order of the CIT(A) in deleting the addition - Decided against revenue. Disallowance of depreciation - assessee is charitable or religious institution - during the appellate proceedings the assessee requested for withdrawal of the ground raised against the said issue - HELD THAT - Since the issue regarding applicability of the amendment to Section 11 has been settled in DIT (Exemption) Vs. Indraprastha Cancer Society case 2014 (11) TMI 733 - DELHI HIGH COURT and other connected Appeals, we find no error or infirmity in the order of the CIT(A). Merely because a ground has been deleted by the assessee and later on pressed the said ground by way of a submission, the authorities cannot deny the legal entitlement of allowability of depreciation to the assessee, which has been rightly granted to the Assessee by the CIT(A), accordingly, we find no merit in revenue ground.

Summary

Issues involved:
The judgment involves the deletion of additions made by the Assessing Officer (AO) on account of disallowance of expenses and depreciation for the assessment year 2012-13.

Deletion of Addition of Expenses:
The assessee appealed against the addition of expenses made by the AO, claiming that the expenses were duly audited and certified by the statutory auditor. The CIT(A) deleted the additions after verifying that the expenses were furnished to the AO and were in line with the trust's charitable objectives. The Tribunal found no error in the CIT(A)'s decision and dismissed the Revenue's appeal regarding this issue.

Deletion of Addition of Depreciation:
The AO disallowed depreciation, but during the appellate proceedings, the assessee requested to withdraw the ground against disallowance. However, later the assessee pleaded for the reversal of the disallowance. The CIT(A) allowed the depreciation claimed by the assessee, citing that charitable institutions were not eligible for depreciation under the provisions of the Income-tax Act. The Tribunal upheld the CIT(A)'s decision, emphasizing that the legal entitlement of depreciation cannot be denied to the assessee. The Tribunal dismissed the Revenue's appeal on this issue.

Conclusion:
The Tribunal dismissed the Revenue's appeal against the deletion of expenses and depreciation additions made by the AO for the assessment year 2012-13. The judgment highlighted the eligibility of charitable institutions for depreciation and upheld the CIT(A)'s decision in favor of the assessee.