Commissioner Of Income Tax, Hisar v. Market Committee, Dharsul

ITA No. 430 of 2010 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income Tax, Hisar Versus Market Committee, Dharsul ITA No. 430 of 2010Date of Decision: 14.9.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. ADARSH KUMAR GOEL, J. 1.This appeal has been preferred by the revenue underSection 206A of the Income Tax Act, 1961 (in short “the Act”) againstthe order of the Income Tax Appellate Tribunal, Delhi Bench 'C', NewDelhi (hereinafter referred to as “the Tribunal”) dated 9.10.2009 passedin ITA No. 2984/Del/09, for the assessment year 2006-07, proposingfollowing questions of law:- “i)Whether on the facts and in the circumstances of thecase, the learned ITAT was justified in holding thatthe depreciation on fixed asset is allowable in thecase of charitable trust/institution particularly whenthe income is computed as per provisions of section11 to 13 of the Income-tax Act, 1961 and question of (ii) depreciation does not arise when capital expenditureis also considered as application of income of theassessee and there remains no assets/WDV forclaim of depreciation. The strength is drawn from theorder of the Hon'ble Supreme Court of India passedin the case of Escorts Ltd. & another Vs. Union ofIndia and Others reported in 199 ITR 43 (108) CTR275 wherein it has been held that when deductionunder s. 35(2)(iv) is allowed in respect of capitalexpenditure on scientific research, no depreciation isallowed under s. 32 on the same asset. There is afundamental axiom that double deduction is notintended unless there is a clear statutory indication tothe contrary? Whether on the facts and in the circumstances of thecase, the learned ITAT was justified in holding thatthe expenditure of Rs.19,49,182/- claimed to havebeen contributed to HSAM Board under statutoryobligation by virtue of section 27 of the PunjabAgricultural Produce Market Act, 1961 is allowablewithout appreciating that no evidence could beproduced by the assessee to prove that suchexpenditure was actually incurred and whether suchcontribution can be treated to fall within the ambit ofapplication of income for charitable purposes anddefined in section 2(15) of the Income-tax Act?” 2.The assessee is a statutory body under the provisions ofthe Punjab Agricultural Produce Market Act, 1961, to regulate themarketing of agricultural produce. It has also been registered as aTrust under the Act. While assessing the application of its incomeunder Section 11, the Assessing Officer disallowed the claim ofdepreciation and contribution made to the Marketing Board. The CIT(A) upheld the plea of the assessee for deduction of depreciation whichview has been affirmed by the Tribunal. 3.We have heard learned counsel for the revenue. 4.It is not disputed that question No. (i) is covered against therevenue by the judgment of this Court dated 5.7.2010 in ITA No. 535 of 2009 (The Commissioner of Income Tax, Karnal v. MarketCommittee, Pipli) and question No. (ii) is also covered against therevenue by the order of this Court dated 5.7.2010 in ITA No. 151 of2010 (Commissioner of Income Tax, Hisar v. Market Committee,Narwana). 5.Accordingly, the appeal is dismissed. . (ADARSH KUMAR GOEL) JUDGE September 14, 2010gbs (AJAY KUMAR MITTAL)JUDGE