Appeal Dismissed: Depreciation Disallowance & Deficit Carry Forward Upheld. No Substantial Question of Law.

The High Court dismissed the appeal challenging the disallowance of depreciation and the allowance of carry forward of deficit. The Court relied on previous decisions, including those by the Supreme Court, to conclude that no substantial question of law arose from the Tribunal's order. The appellant's arguments against double deduction were countered by established legal precedents, leading to the dismissal of the appeal without any order as to costs.

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Issues:
1. Disallowance of depreciation in contravention of previous decisions.
2. Allowance of carry forward of deficit and set off against subsequent years' income.

Issue 1: Disallowance of Depreciation
The appeal under Section 260A of the Income Tax Act, 1961 challenged the order of the Income Tax Appellate Tribunal regarding the disallowance of depreciation. The first proposed question of law questioned the Tribunal's decision on allowing the assessee's appeal despite the disallowance of depreciation. The appellant cited a decision in the case of Escorts Ltd. v/s UOI to support their argument against double deduction on account of depreciation. The High Court noted that a similar issue had been addressed in Commissioner of Income Tax v/s Institute of Banking Personnel Selection, where the Court ruled in favor of the assessee. The Supreme Court further affirmed this finding in Commissioner of Income Tax-III, Pune v/s Rajasthan & Gujarati Charitable Foundation Poona. Consequently, the High Court concluded that no substantial question of law arose from the Tribunal's order, leading to the dismissal of the appeal.

Issue 2: Allowance of Carry Forward of Deficit
The second proposed question of law in the appeal concerned the allowance of carry forward of deficit and its set off against subsequent years' income. The appellant argued that such allowance would result in double deduction on expenditure out of exempt income. However, the High Court pointed out that this issue had already been settled in favor of the assessee by the Supreme Court in Commissioner of Income Tax (Exemption), New Delhi v/s Subros Educational Society. Moreover, the High Court mentioned that in previous appeals filed against the present assessee for other assessment years, the Court had dismissed the appeals. Based on these precedents and decisions, the High Court held that no substantial question of law arose from the Tribunal's order regarding the carry forward of deficit. Consequently, the appeal was dismissed without any order as to costs.

This detailed analysis of the judgment highlights the key issues raised, the legal arguments presented, and the precedents relied upon by the High Court in reaching its decision.

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