TaxTMI 
TaxTMI 
2015 (7) TMI 1206
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.... capital expenditure incurred on assets acquired for the objects of the trust as application and does not specifically & expressly provide for double deduction on account of depreciation on the same very assets acquired from such capital expenditure, no deduction shall be allowed u/s. 32 for the same or any other previous year in respect of that asset as it amounts to claiming a double deduction. 2. Whether, on the facts and in the circumstances of the case and in law the Id.CIT(A) erred in allowing the appeal, when the Delhi High Court in the case of Charanjiv Charitable Trust and Kerala High Court in the case of Lissie Medical Institutions vs CIT 76 DTR (Ker) 372 has decided the issue in the favour of the department after considering the decision of Hon'ble Supreme Court in the case of Escorts Ltd (199 ITR -43) 3.Whether on the facts of the case and in law the ld. CIT(A) erred in allowing the carry forward of deficit of Rs. 3,22,34,482/ - and allowing set off against the income of the subsequent years, allowing the deficit will tantamount to double deduction on account of expenditure out of exempt income. 4. Whether, on the facts and in the circumstances of the case and....
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....CIT(A) allowed the benefit of depreciation relying upon the judgment of Hon'ble Jurisdictional High Court in CIT vs. Institute of Banking Personal 264 ITR 110 (Bom). The operative para of the order of the Ld CIT(A) is reproduced hereunder for the sake of ready reference: "5.2 I have considered the facts and circumstances of the case, the assessment order of the A.O. and the submissions of the appellant. The decision of the Hon. Jurisdictional High Court in CIT vs. Institute of Banking Personal (264 ITR 110) on the issue of allowance of depreciation is in favour of the appellant. The AO has not given any other reason for disallowance of depreciation and relied on the decision of the Hon. Apex Court in Escorts Limited case (199 ITR). In fact the decision of the Hon. Jurisdiction Court in CIT vs. Institute of Banking Personnel Selection (2003) 185 CTR 492 (Bom) is applicable in this case. As per decision of the Hon. Higher judicial authorities on this issue, depreciation is allowable as claimed by the appellant." 4. Before me, Ld. DR has vehemently contested the order of CIT(A). It was submitted by him that the claim of the assessee is leading to double deduction in the sense that ....
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....t the question was whether the, income of the assessee, which was a charitable trust, should be computed on commercial principles and if so, whether depreciation on fixed assets used for charitable' purposes should be allowed as a deduction. This Court noticed that there was a consensus of judicial opinion on this aspect and held, after referring to those authorities as well as a circular of the CBDT issued on 19.07.1968, that while computing the income of the trust available for application for charitable purposes, depreciation on assets used for charitable purposes should be allowed. The point to be noticed is that in this judgment, this Court referred to and distinguished the judgment of the Supreme Court in Escorts Ltd. (supra) on the ground that in Escorts (supra), the Supreme Court was concerned with a case where the deduction of the cost of the asset was allowed under Section 35(1) as capital expenditure incurred on scientific research and, therefore, no deduction for depreciation on the very same assets' was held allowable under general principles of taxation, as it would amount to double deduction'. The judgment of this Court in DIT vs. Vishwajagrati Mission re....
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....preciation. In addition to the above, she has further relied upon the judgment of other High Courts and copies of which have been placed in the paper book as per details given below: (I) CIT v. Institute of Banking, Bombay High Court (2003) 264 ITR 110 (ii) CIT v. Devi Sakuntala Tharal Charitable Foundation (2013) 358 ITR452 (MP) (iii) CIT vs. Siliguri Regulated Market Committee (2014) 366 ITR 51 (Cal) (iv) Director of Income Tax v. Vishwa Jagriti Mission (2012) 73 DTR 195 (Del.) (v) CIT vs. Market Committee, Pipli (2011) 330 ITR 16 (Punjab & Haryana) (vi) CIT vs. Tiny Tots Educational Society (2011) 330 ITR 21 (Punjab & Haryana) 7. She further submitted that the decision in the case of Escort Limited (supra) relied upon by the AO has been discussed and distinguished in the judicial pronouncement mentioned at serial no. iv to vi above. She further submitted that rule of consistency should also be applied especially in view of judgment of Hon'ble Bombay High Court in the case of CIT v. Gopal Purohit 336 ITR 287 (Bom) and Aroni Commercial Ltd. vs. DCIT & others (2014) 362 ITR 403 (Bom). She further submitted that the amendment made to section 11 is prospective and is not....
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....n or otherwise in respect of an asset, the acquisition of which has been claimed as application of income under this section in the same or any other previous year. The legal position, therefore, would undergo a change in terms of Section 11(6), which has been inserted and applicable with effect from 1st April, 20015 and not to the assessment years in question." 9. In addition to above, it is further seen by me that the assessee has been getting the benefit of depreciation in all previous years and therefore, as a matter of principle of consistency, the assessee should be eligible to get the benefit of depreciation in this year as well and for this purpose, I derive support from the judgment of Hon'ble Supreme Court in the case of CIT v. Excel Industries Pvt. Ltd. 258 ITR 295. Thus, viewed from all the angles, I find that the assessee is eligible to claim depreciation and the same is directed to be allowed and grounds raised by department are dismissed. 10. Now, I shall take up ground no.3, 4 & 6, dealing with the provisions of the benefit of carry forward of deficit of Rs. 3,22,34,482/. It is seen that the CIT(A) has allowed the ground of the assesses in para 6.3 which is repr....