2016 (2) TMI 1010 - AT - Income Tax

Trust's Depreciation Disallowance Appeal Dismissed; Double Deduction Rejected; Carry Forward Allowed

The Revenue's appeal challenging the disallowance of depreciation claimed by a Trust under section 12A of the Income Tax Act for the assessment year ... Depreciation and double deduction - Carry forward of assessed deficit - Binding precedent of the Hon'ble Bombay High CourtDepreciation and double deduction - Binding precedent of the Hon'ble Bombay High Court - Claim for depreciation allowed despite earlier application of income on purchase being treated as deduction by the Assessing Officer - HELD THAT: - The Assessing Officer disallowed depreciation on the ground that it amounted to a double deduction because the assessee had applied income in the year of purchase. The Commissioner (Appeals) allowed the depreciation claim following the ratio of the decision in CIT vs. Institute of Banking Personnel Selection . The Tribunal noted that the Commissioner (Appeals)'s conclusion is founded on the binding decision of the jurisdictional High Court, and having regard to that precedent and consistent decisions relied upon by the assessee, no interference with the appellate order was warranted. [Paras 4]The appellate decision allowing depreciation is affirmed and the Revenue's challenge on this point fails.Carry forward of assessed deficit - Binding precedent of the Hon'ble Bombay High Court - Direction to allow carry forward of the assessed deficit for set-off in subsequent years upheld - HELD THAT: - The Commissioner (Appeals) directed that the assessed deficit be carried forward for set-off in subsequent years. The Tribunal held that this direction accords with the principle laid down by the Hon'ble Bombay High Court in Institute of Banking Personnel Selection and related authorities cited before the Tribunal, and therefore the appellate authority's direction does not suffer from error. [Paras 6]The direction to permit carry forward of the assessed deficit is affirmed.Final Conclusion: The Revenue's appeal is dismissed; the order of the Commissioner (Appeals) allowing depreciation and directing carry forward of the assessed deficit is affirmed. Issues Involved:1. Disallowance of depreciation claimed by the assessee.2. Allowance of carry forward of current year's assessed deficit for set-off in subsequent years.Analysis:1. The appeal by the Revenue contested the order of CIT(A)-7, Mumbai, concerning the assessment year 2009-10. The primary issue revolved around the disallowance of depreciation claimed by the respondent assessee, a Trust registered under section12A of the Income Tax Act. The Assessing Officer had denied the claim for depreciation on assets, asserting it as double deduction. However, CIT(A) allowed the claim citing the judgment of the Bombay High Court in CIT vs. Institute of Banking Personnel Section. The Revenue challenged this decision, but the Tribunal upheld CIT(A)'s decision based on the binding precedent of the High Court and other supporting decisions, leading to the dismissal of the Revenue's appeal.2. The second issue raised by the Revenue concerned the direction of CIT(A) to allow the carry forward of the current year's assessed deficit for set-off in subsequent years. The Tribunal found this direction consistent with the decision of the Bombay High Court in the Institute of Banking Personnel Selection case. Consequently, the Tribunal affirmed CIT(A)'s decision on this aspect as well, concluding that no error could be identified. As a result, the appeal by the Revenue was dismissed, and the order was pronounced on 29/02/2016.