2020 (10) TMI 1364 - AT - Income Tax

ITAT upholds CIT(A)'s decisions on proviso to section 2(15) and depreciation allowance.

ACIT (E) Circle – 1, Bengaluru Versus M/s Karnataka Industrial Area Development Board,

The ITAT dismissed the revenue's appeal as both issues raised were found to be settled in favor of the assessee by previous judgments of the Hon'ble ... Exemption u/s 11 - whether proviso to section 2 (15) is not applicable in the present case? - HELD THAT:- As decided in own case [2020 (11) TMI 483 - KARNATAKA HIGH COURT] the proviso to section 2 (15) is not applicable in case of this assessee. Depreciation claim - Second issue is also squarely covered in favour of the assessee by the tribunal order in assessee’s own case in which, the tribunal has followed a judgment of Hon’ble Supreme Court rendered in the case of CIT vs. Rajasthan and Gujarat Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT] Hence, we decline to interfere in the order of CIT (A). Appeal of the revenue is dismissed. Issues:1. Applicability of proviso to section 2(15)2. Allowability of depreciationAnalysis:Issue 1: Applicability of proviso to section 2(15)The appeal filed by the revenue challenged the order of the CIT(A) on the grounds that the proviso to section 2(15) was not applicable in the present case. During the hearing, the revenue's DR supported the assessment order, while the AR of the assessee defended the CIT(A)'s decision. The AR highlighted a judgment of the Hon’ble Karnataka High Court in the assessee's own case, which supported the CIT(A)'s stance. The tribunal had previously ruled in favor of the assessee on this issue, based on a meticulous review of the evidence. Consequently, the ITAT declined to interfere with the CIT(A)'s order, as the issue was already settled in favor of the assessee by the Karnataka High Court's judgment.Issue 2: Allowability of depreciationThe second grievance raised by the revenue was regarding the allowability of depreciation in the present case. The AR of the assessee referred to a tribunal order in the assessee's own case for A.Y. 2012-13, where the tribunal had relied on a judgment of the Hon’ble Supreme Court in a specific case and decided in favor of the assessee. The ITAT found that this issue was also settled in favor of the assessee by the tribunal order, which followed the Supreme Court's judgment. Consequently, the ITAT dismissed the revenue's appeal, upholding the decision of the CIT(A) on the allowability of depreciation.In conclusion, the ITAT, in its judgment, dismissed the revenue's appeal as both issues raised by the revenue were found to be already settled in favor of the assessee by previous judgments of the Hon’ble Karnataka High Court and the tribunal. The ITAT declined to interfere with the CIT(A)'s order, maintaining the decisions on the applicability of the proviso to section 2(15) and the allowability of depreciation in the present case.