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TMI Blog2023 (4) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... merits and therefore, in the interest of justice we consider the request of the assessee and restore the matter to the file of the assessing officer to decide the issue in accordance with law. Appeal of the assessee is allowed for statistical purpose. - ITA. No. 234/JP/2022 - - - Dated:- 18-4-2023 - Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Sh. Mahendra Gargieya (Adv.) And Sh. Devang Gargieya (Adv.) For the Revenue : Smt Monisha Choudhary (Addl. CIT) ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 30/03/2022 [here in after (NFAC)] for assessment year 2016-17 which in turn arise from the order dated 19.11.2018 passed under section 143(3) of the Income Tax Act, by the ITO (Exemption), Ward-1, Jaipur. 2. The assessee has marched this appeal on the following grounds:- 1. 1. The impugned additions and disallowances made in the order u/s 143(3) dated 19.11.2018 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted. 2.1 Rs. 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajasthan Societies Registration Act, 1958 vide No. 710/Jaipur/1998-99. The Society is the society/trust is registered u/s 12AA(1)(b) of I.T. Act, 1961 by the Commissioner of Income-tax, Jaipur vide letter No. CIT/Sec. 12A(a)/85/10/99-2000/9771 dated 23/12/1999. The society is engaged in the providing education. 3.1 The case of the assessee AOP/Trust was selected for scrutiny under CASS. Accordingly, notice u/s 143(2) dated 27/06/2017 was issued and served upon the assessee. Consequent to change of incumbent, notice u/s 142(1) was issued and served upon the assessee calling for certain details/information through e-portal. In response to the above-mentioned notices, required details/information were submitted by the assessee in e-assessment portal which have been examined by AO. 3.2 On examination of 1 E account, it is noticed that the society has claimed deduction of Rs 54,63.625/ towards depreciation and claimed the same as application of income out of receipts of the years. During the course of assessment proceedings vide query letter dated 15/09/2018, the society was specifically asked to explain whether the capital expenditure on which depreciation claimed was ever claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not claimed as application of income. The appellant was given notice on proposed completion of assessment proceedings. However, the appellant did not respond. During the appellant proceedings, the appellant claimed that the appellant has never treated expenditure incurred on acquisition of capital assets as application of income for charitable purposes u/s.11(1)(a) of the I.T.Act in the previous year and in all preceding previous years. The appellant merely submitted alternative proposition of treating the entire expenditure amounting to Rs.1,33,01,255/- incurred for acquisition of capital assets as application of income. I am not inclined to accept the alternative proposition of the appellant to treat the entire expenditure of Rs.1,33,01,255/- incurred for acquisition of capital asset as application of income. Just providing mere statement without any documentary evidence which is a proof that appellant has indeed incurred expenditure as mentioned above for acquisition of assets as application of income. In the absence of the same, I am not inclined to accept the contention of the appellant. In result the appeal of the appellant on this ground is dismissed. 5. As the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year and accordingly, an amount of Rs.54,63,625/- was disallowed. The CIT(A) also confirmed the same. Hence this Ground. Submission: 1. As regards the claim of depreciation, the AO referred to the amended law u/s 11(6) inserted vide Finance Act, 2014 w.e.f. 01.04.2015 which was made effective from A.Y. 2015-16 and is reproduced hereunder: (6) In this section where any income is required to be applied or accumulated or set apart for application, then, for such purposes the income shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under this section in the same or any other previous year. The case of the AO was that the appellant having already claimed the capital expenditure in the preceding years/current year as application of income, the depreciation w.r.t. cost of such asset, if permitted, will amount to double deduction which was not permissible as per the amended law. The ld. CIT(A) also simply swayed away by the amended position of law but authorities below proceeded on a wrong premise that the subjected claim of depreciation Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance no. 2 Act, 2014 will not disentitle the assessee from making such a claim. The plain and unambiguous language of the amendment made, established that the intent of the legislature in denying the claim of depreciation is only to prohibit double claim of application of income viz (a) one, the cost of acquisition being claimed as application of income and, (b) second, while claiming depreciation on the same very asset once again. In the past, when such dispute arose, the matter reached to the Hon ble Rajasthan High court and even upto the stage of Hon ble SC where however, such issue was answered against the revenue in the case of CIT(E) Vs. Subros Educational Society (2018) 303 CTR (SC) 1. However, to undone the effect of the said judgement and the judicial precedents, above amendment is made. 3. It is submitted that a bare reading of the amended law makes it clear that the disallowance of claim of depreciation has to be only in respect of such asset, the cost of which has already been claimed and allowed as application of income but not otherwise. In the present case, however, as per the relevant documents enclosed in the paper book filed dated 25.01.2023, computation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. The finding recorded by the ld. AO is without giving the assessee the opportunity of being heard in the matter and the substantial amount has been disallowed. Even before the ld. CIT(A) the alternative claimed made by the assessee was not considered so as to allow the fresh capital expenditure against the disallowance of claim of depreciation. 7. The ld. DR is heard who has relied on the findings of the lower authorities and submitted that the assessee was given specific show cause notices against which the assessee remain silent and no information was submitted that has been called for by the ld. AO. Even to claim the capital expenditure against disallowance of depreciation no details of the capital expenditure so as to consider the claim of the assessee were filed before the ld. CIT(A). Therefore, the ld. CIT(A) has rightly denied the claim in the absence of the information from the side of the assessee. Based on this submission she supported the orders of the lower authorities and prayed to confirm the finding of the lower authroties. 8. We have heard the rival contentions and perused the material placed on record. The bench noted that the assessee is an educational in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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