Itta/656/2015 Of The Director Of Income Tax, (Exemptions) v. Exhibition Society

THE HON’BLE SRI JUSTICE RAMESH RANGANATHANANDTHE HON’BLE SRI JUSTICE M.SATYANARAYANA MURTHY ITTA.No.656 of 2015 JUDGMENT:(Per the Hon’ble Sri Justice RameshRanganathan) Heard Sri J.V.Prasad, learned Senior Standing Counsel forIncome Tax, and Mrs.K.VijayaLakshmi, learned counsel for therespondent-assessee and, with their consent, the writ petition isdisposed of at the stage of admission.This appeal is preferred by theRevenue against the order passed by the Income Tax AppellateTribunal, Hyderabad in I.T.A.No.1195/Hyd/2009 dated 22.03.2012 for-the assessment year 200607. In the order under appeal, the Tribunal directed the assessingofficer to verify, in respect of each asset on which depreciation wasclaimed, whether the value of such asset was in fact allowed underSection 11 of the Income Tax Act, 1961 (for short “the Act”); and, if itwas so allowed, whether depreciation should not be allowed inrespect of such asset.The Tribunal held that it is only if the value ofthe asset was not allowed as expenditure under Section 11 of the Act,was the assessing officer required to allow depreciation thereon as perthe rate applicable to those assets.The assessing authority wasdirected to consider the matter afresh in the light of the observations inthe order. While the assessee’s application under Section 10(23C)(iv) ofthe Act was rejected, the order of the Tribunal required their claim forexemption under Section 11 of the Act to be considered by theassessing authority independent thereof.S r i J.V.Prasad, learnedSenior Standing Counsel for Income Tax, would submit that, in theabsence of the assessee having obtained a notification under Section10(23C) of the Act, they were not entitled to claim exemption underSection 11 of the Act. As Section 11 of the Act operates in a field distinct from Section 10(23C) of the Act, even though the criteria prescribed for exemptionoverlaps to a certain extent, rejection of an application under Section10(23C)(iv) of the Act would not disentitle the assessee from claimingexemption under Section 11 of the Act. A similar question regardingthe assessee’s claim for exemption under Section 11 of the Act, in theabsence of a notification under Section 10(23C)(vi) of the Act, fell forconsideration in ITTA.No.635 of 2015 and this Court, after taking intoconsideration the CBDT Circular dated 17.08.2015, dismissed theappeal holding that the absence of a notification, under Section10(23C)(vi) of the Act, would not disentitle the assessee from claimingexemption under Section 11 of the Act on their fulfilling the criteriaprescribed therefor. Absence of a notification under Section 10(23C)(iv) of the Actwould not bar the assessee from claiming exemption under Section 11of the Act.As the matter has merely been remanded to the assessingauthority for his consideration, as to whether the assessee was eligiblefor exemption under Section 11 of the Act, we are satisfied that nosubstantial question of law arises for consideration necessitating the-appeal being entertained under Section 260A of the Act. The appeal fails and is, accordingly, dismissed. Miscellaneouspetitions pending, if any, shall also stand dismissed. There shall be noorder as to costs. ______________________________ (RAMESH RANGANATHAN, J) ___________________________________ (M.SATYANARAYANA MURTHY, J) 13[th] July 2016JSU THE HON’BLE SRI JUSTICE RAMESH RANGANATHANAND THE HON’BLE SRI JUSTICE M.SATYANARAYANA MURTHY ITTA.No.656 of 2015 JSU Date: 13.07.2016