The Director of Income-tax (Exemption) v. The Watch Tower Bible & Tract Society of India
[Citation -2014-LL-1210-6]

Citation 2014-LL-1210-6
Appellant Name The Director of Income-tax (Exemption)
Respondent Name The Watch Tower Bible & Tract Society of India
Court HIGH COURT OF BOMBAY
Relevant Act Income-tax
Date of Order 10/12/2014
Assessment Year 2007-08
Judgment View Judgment
Keyword Tags capital expenditure • exemption under section 11
Bot Summary: The order is passed in Income Tax Appeal No.4283/Mum/2011 for y the Assessment Year 2007-08. Allowance of depreciation on the assets, costs of which have already been allowed as deduction on account of application of income, would amount to double deduction B and the judgment of the Hon'ble Supreme Court in the case of Excort Ltd. vs. Union of India, 1999 ITR page 43 has been erroneously left out of consideration. In relation to that ig reliance is placed on an order in Income Tax Appeal No.822 of 2012 decided on 12 September 2014 in Income Tax Appeal No.797 H of 2012 decided on 26 September 2014. The distinction, as made therein, has been followed in the later decision in the case of Commissioner of Income Tax v/s. The Income Tax C Officer held in that case that depreciation could not be taken into account because full capital expenditure has been allowed in the h year of acquisition of the assets. The Tribunal in that case took a ig view that what the Assessing Officer really meant was that the amount spent on acquiring those assets has been treated as H application of income of the Trust in the year in which the income was spent in acquiring these assets. H Parmeshwaridevi Gordhandas Garodia Charitable Trust, Income Tax Appeal No.822 of 2012, in any way runs contrary to the order of y admission of an Appeal bearing Income Tax Appeal No.1413 of ba 2012, on 5 March 2014.


1/5 itxa-1548-12.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION rt INCOME TAX APPEAL NO.1548 OF 2012 ou Director of Income Tax (Exemption) .Appellant v/s. Watch Tower Bible & Tract Society of India .Respondent C Mr.Sureshkumar for Appellant. Mr.Mandar Vaidya for Respondent. ... CORAM : S.C.DHARMADHIKARI & h A.A. SAYED, JJ. P.C. ig DATED : 10 DECEMBER 2014 Revenue is aggrieved by order passed by H Income Tax Appellate Tribunal, Mumbai Bench dated 6 June 2012. order is passed in Income Tax Appeal No.4283/Mum/2011 for y Assessment Year 2007-08. ba 2. Mr.Sureshkumar submits that Appeal raises om substantial questions of law. Allowance of depreciation on assets, costs of which have already been allowed as deduction on account of application of income, would amount to double deduction B and judgment of Hon'ble Supreme Court in case of Excort Ltd. vs. Union of India, 1999 ITR page 43 has been erroneously left out of consideration. It is in these circumstances, Uday Kambli 1/5 ::: Downloaded on - 11/08/2015 16:11:31 ::: 2/5 itxa-1548-12.doc Appeal deserves to be admitted and as similar question has rt been admitted in Income Tax Appeal No.1413 of 2012 on 5 March ou 2014 by this Court. 3. On other hand, Mr.Vaidya, learned Counsel for C Assessee, relies upon several orders which have been passed from time to time by us dealing with same questions and refusing to h admit them as substantial questions of law. In relation to that ig reliance is placed on order in Income Tax Appeal No.822 of 2012 decided on 12 September 2014, then, in Income Tax Appeal No.797 H of 2012 decided on 26 September 2014. 4. In this case, as fact, Tribunal found that y Assessee filed return of income declaring income at `Nil' and ba assessment order was passed determining Assessee's income as Rs.1,75,88,387. claim of depreciation to extent om of Rs.2,07,45,118/- claimed by Assessee on printing machinery & equipments, computers etc. was denied. Assessing Officer B also has denied exemption under section 11 of IT Act and in amount claimed by Assessee. order of Assessing Officer was challenged in Appeal before Commissioner, who partly allowed it. In dealing with claim of double deduction Uday Kambli 2/5 ::: Downloaded on - 11/08/2015 16:11:31 ::: 3/5 itxa-1548-12.doc raised before us, Assessing Officer's view has been reversed by rt Commissioner by applying ratio of decision of this Court ou in case of CIT vs. Institute of Banking Personal Selection, reported in 264 ITR 110 and in case of CIT vs. Nagpur Hotel Owners' Association, reported in 247 ITR 201. C 5. Tribunal referred to this aspect and concluded that h Assessee in this case had pointed out that claim of ig depreciation stands fully covered by these two judgments. It was pointed out that income was applied initially for acquisition of H assets. Later on depreciation was claimed on use of assets and from year of its acquisition and later on. y 6. Previously, such question was raised by Revenue ba in Income Tax Appeal No.797 of 2012 decided on 26 September 2014. While negativing arguments of Revenue, this Court has om relied upon earlier judgment of this Court rendered in case of Director of Income Tax (Exemption) v/s. Framjee Cawasjee v/s. B Framjee Cawasjee Institute, (1993) 109 CTR 463. distinction, as made therein, has been followed in later decision in case of Commissioner of Income Tax v/s. Institute of Banking Personnel Selection, (2003) 264 ITR 110, Division Bench, to which one of Uday Kambli 3/5 ::: Downloaded on - 11/08/2015 16:11:31 ::: 4/5 itxa-1548-12.doc us (S.C.Dharmadhikari, J.) was party, then held that two rt Division Bench judgments conclude that Assessee in Framjee's ou case was Trust. It derived its income from depreciation assets. Assessee took into account depreciation of those assets in computing income of Trust. Income Tax C Officer held in that case that depreciation could not be taken into account because full capital expenditure has been allowed in h year of acquisition of assets. Tribunal in that case took ig view that what Assessing Officer really meant was that amount spent on acquiring those assets has been treated as H application of income of Trust in year in which income was spent in acquiring these assets. This does not mean that in y subsequent years, depreciation in respect of those assets cannot be ba taken into account. That is how question was answered by Division Bench of this Court in Framjee's case. That view has been om consistently followed and applied in similar situation. It is precisely that view which has been applied in this case and on B identical facts to Assessee before Tribunal and before us. Tribunal has also referred to judgments of Hon'ble Supreme Court and held that there is no merit in contention of Departmental Representative that decision of Hon'ble Uday Kambli 4/5 ::: Downloaded on - 11/08/2015 16:11:31 ::: 5/5 itxa-1548-12.doc Supreme Court in CIT vs Nagpur Hotel Owners' Association, rt reported in 247 ITR 201, with regard to claim of depreciation would ou in any way enable it to hold that Commissioner has committed error of law apparent on face of record. reasons in para 14 of order under challenge upholding conclusion of C Commissioner, therefore, do not suffer from any error of law apparent on face of record. h 7. order in ig We do not find that this view taken by us and in another case of Director of Income Tax v/s. H Parmeshwaridevi Gordhandas Garodia Charitable Trust, Income Tax Appeal No.822 of 2012, in any way runs contrary to order of y admission of Appeal bearing Income Tax Appeal No.1413 of ba 2012, on 5 March 2014. 8. In such circumstances, we conclude that present om Appeal does not raise any substantial question of law. It is accordingly dismissed. No costs. B (A.A. SAYED, J.) (S.C.DHARMADHIKARI,J.) Uday Kambli 5/5 ::: Downloaded on - 11/08/2015 16:11:31 ::: Director of Income-tax (Exemption) v. Watch Tower Bible & Tract Society of India
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