ITAT Decision: Depreciation upheld, exempt income excluded, diminution issue remitted for examination.

The ITAT upheld the assessee's claim for depreciation, ruling it was not a double deduction but a reduction of income for trust purposes. The ITAT remitted the issue of diminution in investment value back to the Assessing Officer for proper examination, emphasizing justice. The ITAT dismissed the inclusion of exempt income in assessed income due to lack of original claim. The Revenue's appeal was partly allowed for statistical purposes, and the assessee's cross objection was dismissed. The judgment provided detailed legal reasoning for each issue, ensuring a comprehensive review of the case.

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Issues:
1. Depreciation claimed as application of money leading to double deduction.
2. Deletion of addition for diminution in the value of investment.
3. Exempt income inclusion in the assessed income.

Issue 1: Depreciation claimed as application of money leading to double deduction:
The Assessing Officer disallowed depreciation of Rs. 4,55,683 claimed by the assessee, asserting it as a double deduction. However, the Ld. Commissioner of Income Tax (A) referred to the decision of the Hon'ble Punjab and Haryana High Court in a similar case and ruled in favor of the assessee. The ITAT upheld the decision, stating that the assessee was not claiming double deduction but seeking to reduce income for determining the percentage of funds applied for trust purposes. Citing the High Court's decision, the ITAT affirmed the Ld. Commissioner's order, finding no infirmity.

Issue 2: Deletion of addition for diminution in the value of investment:
The Assessing Officer questioned the provision of Rs. 13,72,655 for diminution in the value of investment, contending it was not applied for the society's objectives. The Ld. Commissioner of Income Tax (A) partially allowed the appeal, directing the Assessing Officer to verify a mathematical error and reconsider the claim. The Revenue appealed this decision. The ITAT found the Ld. Commissioner's order lacking proper analysis and remitted the matter to the Assessing Officer for a fresh examination, emphasizing the interest of justice. The ITAT directed the Assessing Officer to reevaluate the issue.

Issue 3: Exempt income inclusion in the assessed income:
The assessee raised objections regarding the inclusion of exempt income in the assessed income. However, it was found that no such claim was made before the authorities, and no addition was made by the Assessing Officer or sustained by the Ld. Commissioner of Income Tax (A). The ITAT dismissed the issue, stating that the assessee cannot raise a new ground at this stage, as no question of law was involved. Referring to relevant case laws, the ITAT held that the claim of deduction not originally made by the assessee cannot be entertained at this juncture.

In conclusion, the ITAT partly allowed the Revenue's appeal for statistical purposes and dismissed the assessee's cross objection. The judgment provided detailed analysis and legal reasoning for each issue raised, ensuring a fair and thorough examination of the matters at hand.

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