TaxTMI 
TaxTMI 
2015 (3) TMI 1289
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....the assessee for 2004-05 "1. That the ld. CIT(A) is wrong, unjust and has erred in law in holding the proceedings u/s 147/148of I.T. Act, 1961 initiated in the case of assessee trust by AO are not wrong and bad in law. 2.1 The ld. AR of the assessee has not pressed this ground at the time of hearing. Hence, it is dismissed being not pressed. Rest of the grounds for AYs 2004-05 and 2009-10 are common assailing the denial of application of benefits u/s 11 and 12 of I T Act to this charitable hospital on the purported violation of sec. 13(1)(d), same are as under: 1. That ld. CIT(A) is wrong, unjust and has erred in law in holding that provisions of Section 13(1)(d) of I.T. Act, 1961 are applicable in the case of assessee ....
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.... 4. That on the facts and circumstances of the case, the ld. CIT(A) should have held that assessee trust is entitled for exemption u/s 11 & 12 of I.T. Act, 1961 on the principle of rule of consistency. 2.2 Common grounds raised by the Revenue in assessment years 2004- 05 and 2009-10 are as under:- "(i) Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in allowing the depreciation of Rs. 2,58,4,558/- (A.Y. 2004-05) and Rs. 3,29,58,149/- (A.Y. 2005-06) even on the value of such assets, which have been allowed as applicable of income in earlier years. (ii) Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) ought to have directed the AO to....
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....o maximum marginal rate. We find force in this argument. As per the scheme of the Act, first the trust income is to be worked out, thereafter, benefits of provision of secs. 11 and 12 are to be applied. Remainder income is than to be treated with regular provisions of the Act and resultant income i.e. taxable income is to be subjected to maximum marginal rates. Applying this scheme of the I T Act to assessee case the non-beneficial income is in the form of dividend income from TISCO shares. There is no dispute between the parties about the nature of income being dividend and quantum thereof. In the backdrop of these facts the dividend income being exempt from income by express provisions of sec 10(34), the dividend income is exempt from Inc....
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....s acquired out of application of trust income, irrespective of the facts that cost of purchase is out of application of income exempt u/s 11 and 12 of the Act. Following are the case laws relied:- a. In ITO. v. S.S. Jain Subodh Shiksha Samiti in [ITA No. 250/JP/2007] it was held: Where the society had claimed depreciation even when the cost of the assets have been treated as applied, it shall be treated as applied towards the income of the society.The word 'applied' used in section 11 should be construed widely and not in a narrow sense as held in : b. In ACIT vs. Bhopal Campion School Society [2011] 14 Taxmann.com 59 (Indore) it was held: Even otherwise, depreciation allowance is a concession granted by ....
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....anchod Das Vishram Bhawan Trust [198 ITR 598 (Guj)] it was held: The amount of depreciation debited to the accounts of the charitable institutions has to be deducted to arrive at the income available for application to charitable and religious purposes. e. In CIT vs. Society of Sister St. Anne 146 ITR 28 had allowed depreciation in addition to capital expenditure. f. In Pooran Mal Phoola Devi Memorial Trust vs. ITO (JP ITAT) it was held that depreciation is allowable as application of income. g. Latest judgment in GKR Charities v. Dy. DIT (Exemptions) [2011] 46 SOT 23 is also of the view that benefit of depreciation is different from claim of capital expenditure and both are allowable distinctively. ....
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.... not get excluded from the condition of application of income for charitable purpose. In view of the above, it is also proposed to amend the Act to provide that under section 11 and 10 (23C), income for the purposes of application shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under these sections in the same or any other previous year. These amendments will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015- 16 and subsequent assessment years." Thus the change in legal position about eligibility of depreciation qua assets acquired by me....