Tribunal upholds depreciation on fixed assets & business loss benefits, Revenue appeal dismissed

The Tribunal upheld the allowability of depreciation on fixed assets and the carry forward benefits of business loss and unabsorbed depreciation, following the precedent set by the Bombay High Court judgment. The appeal of the Revenue was dismissed, and the cross objection filed by the assessee was also dismissed.

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Issues:
1. Allowability of depreciation on fixed assets and carry forward benefits of business loss and unabsorbed depreciation.

Analysis:
The appeal was filed by the Revenue against the order of the CIT(A) -1 Mumbai for the assessment year 2008-2009. The core issue revolved around the allowability of depreciation under section 32 of the Income Tax Act on fixed assets and the carry forward benefits of business loss and unabsorbed depreciation. The Revenue contended that allowing these claims would result in a case of double deduction, citing the decision in Escorts Ltd. v/s. UOI 199 ITR 43. The Ld. Counsel for the assessee argued that the issue was covered by the jurisdictional High Court judgment in the case of CIT Vs. Institute of Banking personnel, 246 ITR 110, which allowed claims under section 32 for assets purchased out of funds exempted under section 11 of the Act.

The Tribunal considered the arguments of both parties and reviewed the orders and submissions. The limited issue before the Tribunal was the applicability of the Bombay High Court judgment in the case of CIT Vs. Institute of Banking Personnel, 246 ITR 110. The Tribunal noted that the High Court had held that depreciation is allowable on assets purchased for computing the application of income, as it does not amount to double deduction but is part of computing applicable income. Citing the decisions of other courts and ITAT, the Tribunal directed the AO to allow the depreciation and unabsorbed depreciation as per law, following the precedent set by the jurisdictional High Court.

Based on the binding judgment of the Bombay High Court and the settled nature of the issue, the Tribunal concluded that the claim of depreciation is allowable on assets purchased for computing the application of income of the Society. Therefore, the Tribunal dismissed the appeal of the Revenue, upholding the decision of the CIT(A) in allowing the depreciation and unabsorbed depreciation claims.

Regarding the cross objection filed by the assessee, the Ld. Counsel informed the Tribunal that the assessee did not wish to press the issue raised in the cross objection. Consequently, the Tribunal dismissed the cross objection as not pressed. Overall, the appeal of the Revenue was dismissed, and the cross objection filed by the assessee was also dismissed.

In conclusion, the Tribunal upheld the allowability of depreciation on fixed assets and the carry forward benefits of business loss and unabsorbed depreciation, based on the precedent set by the Bombay High Court judgment and other relevant legal decisions.

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