HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 277 / 2017 Commissioner of Income Tax (Exemptions), 3rd Floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur. Appellant Versus Mahima Shiksha Samiti, A-18, Shanti Path, Tilak Nagar, Jaipur (A.Y.2013-14) Respondent D.B. Income Tax Appeal No. 278 / 2017 Commissioner of Income Tax (Exemptions), 3rd Floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur Appellant Versus Mahima Shiksha Samiti, A-18, Shanti Path, Tilak Nagar, Jaipur (A.Y. 2012-13) Respondent For Appellant(s) : Mr. Daksh Pareek for Mr. Sameer Jain HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 06/10/2017 1. In both these appeals common question of law and facts are involved hence they are decided by this common judgment. 2. By way of these appeals, appellant has assailed judgment and order of tribunal whereby tribunal has allowed appeal of assessee and dismissed appeal of department. (2 of 5) [ITA-277/2017] 3. Counsel for appellant has framed following substantial questions of law:- 3.1 Appeal No.277/2017 (i) Whether on facts and in circumstances of case and in law, Hon ble ITAT is right in confirming decision of Ld. CIT (A) in allowing assessee s claim of exemption u/s 11 even though provisions of section 13 are attracted? (ii) Whether on facts and in circumstances of case and in law, Hon ble ITAT is right in confirming decision of Ld. CIT (A) in allowing salary expenses to member of Bakshi Family which is higher than reasonable? (iii) Whether on facts and in circumstances of case and in law, Hon ble ITAT is right in allowing contribution made to Jaipur National University during year under consideration as application of income u/s 11 of Act despite of fact that assistance provided to JNU is violation of bye laws of society as well as violation of provision of Sec.13(1)(c) and 13(2) of IT Act? (iv) Whether on facts and in circumstances of case and in law, Hon ble ITAT is right in holding that assessee is eligible to claim deduction of depreciation of Rs.75,18,809/- on assets which were claimed as application u/s 11 at time of purchase? (v) Whether on facts and in circumstances of case and in law, Hon ble ITAT is right in allowing depreciation without appreciating fact that application of 100% expenditure of capital assets is already allowed as capital expenditure hence further allowance of depreciation on same capital asset would amount to double allowance? (vi) Whether on facts and in circumstances of case and in law, Hon ble ITAT is right in allowing depreciation without appreciating fact that assessee has not carried out business activities but receipts utilized for charity. As there was no business, claim of depreciation was not allowable, deprecation is allowable only in case of business or profession or in case of income from other sources ? (3 of 5) [ITA-277/2017] 3.2 Appeal No.278/2017 (i) Whether on facts and in circumstances of case and in law, Hon ble ITAT is legally correct in confirming decision of Ld. CIT (A) in allowing assessee s claim of exemption u/s 11 even though provisions of section 13 are attracted? (ii) Whether on facts and in circumstances of case and in law, Hon ble ITAT is legally correct in confirming decision of Ld. CIT (A) in allowing salary expenses to member of Bakshi Family which is higher than reasonable? (iii) Whether on facts and in circumstances of case and in law, Hon ble ITAT is legally correct in allowing contribution made to Jaipur National University during year under consideration as application of income u/s 11 of Act despite fact that assistance provided to JNU is violation of bye laws of society as well as violation of provision of Sec.13(1)(c) and 13(2) of IT Act? (iv) Whether on facts and in circumstances of case and in law, Hon ble ITAT is legally correct in holding that assessee is eligible to claim deduction of depreciation of Rs.72,58,057/- on assets which were claimed as application u/s 11 at time of purchase? (v) Whether on facts and in circumstances of case, learned Tribunal is justified in allowing depreciation without appreciating fact that application of 100% expenditure of capital assets is already allowed as capital expenditure hence further allowance of depreciation on same capital asset would amount to double allowance? (vi) Whether on facts and in present circumstances of case, learned Tribunal is justified in allowing depreciation without appreciating fact that assessee has not carried out business activities but receipts utilized for charity. As there was no business, claim of depreciation was not allowable, deprecation is allowable only in case of business or profession or in case of income from other sources ? 4. facts of case are that respondent assessee namely Mahima Shiksha Samiti is registered society u/s 12A(a) (4 of 5) [ITA-277/2017] of Income Tax Act, 1961 w.e.f. 17.12.1990. object of society/trust is to provide education through running of primary, higher primary, secondary and higher secondary schools, colleges, higher education institution under society. 4.1 assessee for relevant assessment year filed its return on 15.1.2014, declaring total income NIL after claiming exemption u/s 10,11 and 12 of Act. case of assessee was selected for scrutiny and for that notices u/s 143(2)/142(1) were issued from time to time and assessee in compliance thereto attended proceedings and furnished required details. After considering return of income and details filed during course of assessment proceedings, ld. AO vide his order dt. 16.3.2016, completed assessment u/s 143(3) at income of Rs.13,11,27,700/-. 5. Now issue is squarely covered by decision of this court in case of same assessee in DBITA No.708/2008 decided on 3.10.2017 wherein it has been held as under:- 20. On first issue as stated above, same is required to be answered in favour of assessee that u/s 11 & 13, expenses which are transferred to private university while holding Sec.13 definition and explanation and substantial controlled or substantial transferred are not in their name. It may be private institution which is creation of statue having controlled by same trustee and will not indirectly covered u/s 13 merely because trustees of beneficiaries of trust or any person controlling trust which is part of another institution. object is to see where even transfer for educational purpose or not that has been done. In that view of matter, contention (5 of 5) [ITA-277/2017] that university will be covered u/s 13, in our considered opinion merely because same trustees or directors or persons are there, Sec.13 except with explanation is required to be considered and tribunal has rightly considered that trustees will not be covered u/s 13. 21.Regarding depreciation in view of amendment Sec.11(6) it will be prospective and in view of jurisdictional high court judgment binding on us and we are following same. 22.In that view of matter, depreciation is rightly allowed. On question of foreign trip after taking into consideration student exchange programme tribunal has come to conclusion that it is covered under purpose of trust object and are done for educational institution and benefit of students, in our considered opinion, expenses of foreign trip are also rightly allowed. 6. In view of above, no substantial question of law arises. 7. Hence, appeals stand dismissed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Brijesh 6-7. Commissioner of Income-tax (Exemptions), Jaipur v. Mahima Shiksha Samiti