Commissioner Of Income Tax, Panchkula v. Market Committee, Yamuna Nagar

ITA No. 753 of 2010 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income Tax, Panchkula Versus Market Committee, Yamuna Nagar ITA No. 753 of 2010 Date of Decision: 7.1.2011 ....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 order will dispose of ITA Nos. 753 and 760 of 2010 ascommon questions are involved in both the appeals. 2.ITA No. 753 of 2010 has been preferred by the revenueunder Section 260A of the Income Tax Act, 1961 against order dated31.12.2009 passed by the Income Tax Appellate Tribunal, ChandigarhBench “B”, in ITA No. 1038/Chdl/2009 for the assessment year 2006-07, claiming following substantial questions of law:- “(a)Whether on the facts and in the circumstances of thecase, the Hon'ble ITAT is justified in allowingdepreciation on the capital assets, when capitalexpenditure relating to acquisition of such assets hadalready been allowed as “application of income” forthe purpose of allowing exemption under section 11of the Income Tax Act, 1961 and as such further (b) (c) (d) allowing of depreciation on these capital assets willamount to double deduction for the sameexpenditure? Whether the Ld. ITAT's decision to allow doublededuction on depreciation when capital expenditureon the assets has already been allowed, is justified inthe light of the Hon'ble Apex Court's decision inEscorts Ltd. Vs. UOI (199 ITR 43) to the effect that inthe absence of clear statutory indication to thecontrary, the statute should not be read as to permitan assessee two deductions on the sameexpenditure? Whether on the facts and in the circumstances of thecase and in law the order of the Ld. ITAT is perversein deleting the addition of Rs.31,50,000/- in the caseof Market Committee, Yamuna Nagar for A.Y. 2006-07 on account of interest income accrued onadvance ignoring the findings of the CIT(A) on page6 of his order dated 01.09.2009, that as the assesseeis not following purely a cash system of accounting,the interest income of the assessee from suchadvances accrues regularly as per mercantile systemof accounting which has to be accounted for andtaxed on accrual basis? Whether on the facts and in the circumstances of thecase and in law, the Ld. Income Tax Appellate Tribunal was justified in restoring the issue regardingset off of brought forward losses for verification andconsequential allowance despite the fact that theincome of the assessee to be computed u/s 11 to 13of the Income Tax Act, 1961; whereas, there is noprovision to set off the brought forward losses againstexempt income and exemption in each year is basedupon the application of prescribed percentage ofreceipts for charitable purposes?” 3.Learned counsel for the revenue very fairly states thatquestions (a) and (b) are covered by the judgment of this Court dated5.7.2010 in ITA No. 535 of 2009 (The Commissioner of Income Tax,Karnal v. Market Committee, Pipli) whereasquestion (c) is covered bythe judgment of this Court dated 7.7.2010 in ITA No. 138 of 2010 (TheCommissioner of Income Tax, Karnal v. Market Committee,Ladwa). In view of order passed by this Court in ITA No. 535 of 2009,question (d) is decided in the same termsagainst the revenue. 4.Accordingly, the appeals are dismissed. 5.A photo copy of this order be placed on the file of theconnected case. (ADARSH KUMAR GOEL) JUDGE January 7, 2011gbs (AJAY KUMAR MITTAL)JUDGE