AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 959
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....lear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions? (ii) Whether the Hon'ble ClT(A) was correct in not following the decision of Kerala High Court in the case of Lissie Medical Institutions Vs CIT, Kochi in ITA No.42 of 2011 wherein the other judicial pronouncements by various high courts were held to be not applicable holding that the issue of double deduction was not before them? iii) Whether the !TAT was right in not appreciating the intention of legislature not to allow double deduction at any point of time and therefore, for bringing clarity on the issue, the law has been amended w.e.f. AY 2015*16. iv) Whether the Hon'ble CIT(A) was correct in holding that depreciation is allowable in cases of trust on normal commercial principles, where the assessment of trusts are covered u/s 11, 12 and 13 of the I T Act, 1961 and the provisions of section 28 to 44 of the Act are not applicable to charitable trust as only application of income during the year is allowable U/s 11 of the Act and depreciation being a notional expenditure is not allowable. v) Whether the Hon'ble CIT(AI was ....
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....unal. In a recent decision in the case of M/s. Moogambigai Charitable and Educational Trust Vs. Addl. DIT (Exemptions) in ITA No.1224/Bang/2015 Dt.13.7.2016 the Tribunal held in para 11 as under : " 11. We have considered the rival submissions as well as the relevant material on record. At the outset, we note that this issue has been considered by this Tribunal in a series of decisions. In the case of M/s. CMR Janardhana Trust (supra), the Tribunal has again considered and decided this issue in paras 15 to 17 as under : " 15. We have heard the submissions of the ld. DR, who relied on the order of CIT(A) and the decision of the Hon'ble Delhi High Court in the case of DIT(E) Vs. Charanjiv Charitable Trust (2014) 43 taxmann.com 300 (Delhi). We have considered the order of the CIT(A). Identical issue came up for consideration before ITAT Bangalore Bench in the case of DDIT(E) v. Cutchi Memon Union (2013) 60 SOT 260 Bangalore ITAT, wherein similar issue has been dealt with by this Tribunal. In the aforesaid case, the assessee claimed depreciation and the AO denied depreciation on the ground that at the time of acquiring the relevant capital asset, cost of acquisition w....
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....g with a case of two deductions under different provisions of the Act, one u/s. 32 for depreciation and the other on account of expenditure of a capital nature incurred on scientific research u/s. 35(1)(iv) of the Act. The Hon'ble Court thereafter held that a trust claiming depreciation cannot be equated with a claim for double deduction. The Hon'ble Punjab & Haryana High Court has also made a reference to the decision of the Hon'ble Karnataka High Court in the case of CIT v. Society of Sisters of Anne, 146 ITR 28 (Kar), wherein it was held that u/s. 11(1) of the Act, income has to be computed in normal commercial manner and the amount of depreciation debited in the books is deductible while computing such income. In view of the aforesaid decision on the issue, we are of the view that the order of the CIT(A) on the above issue does not call for any interference. 22. Consequently, ground No.5 raised by the revenue is dismissed." 16. It is no doubt true that the Hon'ble Delhi High Court in the case of Charanjiv Charitable Trust (supra) has taken a contrary view but then when two views are possible on an issue, the view favourable to the Assessee has to be followed. The d....
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....ingly, the Assessing Officer applied the provisions of section 13(1)(c) of the Act and assessed the said amount to tax at maximum rate provided under the Act. On appeal, the CIT (Appeals) has held that giving donation or contribution to other education trust or public charitable institution which are run on non-profit business and achieve the objective of the trust similar to or consistent with the assessee's trust for fulfilling the objectives of the assessee-trust and therefore no addition can be made in respect of the amount advanced to the Vidya Bharati Foundation without charging interest. 6. We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on record. The learned Departmental Representative has placed reliance on the provisions of section 13(1)(c) and 13(3) of the Act wherein the persons specified as directly or indirectly benefitted by use or applied of the income or any property of the trust or institution. The learned Departmental Representative has submitted that there is no dispute that one of the trustee of both the trusts is common and further the trustee of the Vidya Bharati F....
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....year exceeds fifty thousand rupees; (c) where such author, founder or person is a Hindu undivided family, a member of the family; (cc) any trustee of the trust or manager (by whatever name called) of the institution; (d) any relative of any such author, founder, person, member, trustee or manager as aforesaid; (e) any concern in which any of the persons referred to in clauses (a), (b), (c), (cc) and (d) has a substantial interest." Thus for attracting the provisions of section 13(1)(c)(ii), the beneficiary of income or property has to be the author trust, any person who has made substantial contribution to the trust in case HUF is the author of the trust, a member of the family or any trustee of the trust or manager, any relative of any such author, founder trustee or manager. Any concern in which any of the persons referred in clause (a) to (d) has a substantial interest. Thus in the case of the assessee, the interest free loan was given to another trust and the common trustee have no substantial interest in any of the trust. Therefore in the absence of any direct or indirect benefit to the trustees or author of assessee trust or to the trust....