2021 (5) TMI 962 - AT - Income Tax

Tribunal Upholds CIT(A) Decision on Tax Exemptions & Depreciation

ITO (E), Ward-1 (2), New Delhi. Versus India Islamic Cultural Centre

ITO (E), Ward-1 (2), New Delhi. Versus India Islamic Cultural Centre - TMI Issues:1. Exemption u/s 11 & 12 of the Income Tax Act, 1961.2. Claim of depreciation on fixed assets.Analysis:Issue 1: Exemption u/s 11 & 12 of the Income Tax Act, 1961:The appeal was against the order of the CIT(A) for the assessment year 2014-15, where the Revenue challenged the exemption granted under sections 11 and 12 of the Act. The CIT(A) allowed the exemption, following previous decisions and the Tribunal's judgment for the assessment year 2009-10. The Revenue contended that the assessee was involved in business activities, thus not eligible for exemption. However, the CIT(A) upheld the exemption based on consistent decisions in favor of the assessee. The Tribunal affirmed the CIT(A)'s decision, stating that no new binding precedent was presented by the Revenue, leading to the dismissal of Ground No.1 raised by the Revenue.Issue 2: Claim of Depreciation on Fixed Assets:The Revenue appealed against the allowance of depreciation on fixed assets by the CIT(A). The Revenue argued that depreciation on assets previously claimed as application of income should not be allowed. The CIT(A) justified the allowance of depreciation citing provisions of the Income Tax Act governing charitable trusts and institutions. The CIT(A) also referred to a judgment by the Delhi High Court in favor of allowing depreciation for charitable institutions. The Tribunal, finding no rebuttal from the Revenue, upheld the CIT(A)'s decision based on the High Court's judgment. Consequently, Ground No.2 raised by the Revenue was dismissed, and the appeal was ultimately rejected.In conclusion, the Tribunal affirmed the CIT(A)'s decision to allow exemption u/s 11 & 12 and the claim of depreciation on fixed assets, dismissing the Revenue's appeal in its entirety.