TaxTMI 
TaxTMI 
2018 (4) TMI 626
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....issioner of Income Tax (Appeals), was justified in directing the AO to disallow depreciation only in respect of assets acquired for the year in which benefit of section 12A had first been availed by the assessee and the subsequent years ignoring the fact that depreciation cannot be allowed on assets whose cost has already been allowed as application of funds? iii. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals), was justified in allowing excess application of income for charitable purposes to be carried forward ignoring the fact that no such carry forward of excess application is allowable as per the provisions u/s 11 of I.T. Act, 1961?. iv. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) was justified in allowing the disallowance of Rs. 16,95,46,061/- made by the AO on account of expenses which cannot be treated as application of income ? v. That the appellant craves leave to add, modify and / or delete any ground(s) of appeal. vi. In the facts and circumstances of the case, the order of the Commissioner of Income Tax (Appeals), Meerut, may be set a....
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....terms of allotment of land / property, the buyer had a clear option that he can withdraw from the contact at any time before the registration of the property. Mere payment of installment by the buyer does not create any title / rights over the property and therefore the recognition of sale is only when the property is registered. Till such time the conveyance is not executed in favour of the allottee, the latter has the option to withdraw from the purchase subject to the forfeiture of a specified amount. Therefore, the system followed by the assessee that income is recognized when sale deed is executed cannot be faulted with. Moreover, in the year under consideration, the AO has made an adhoc addition. No basis has been specified for the quantum such addition. It is also noted that neither has the AO mentioned any deficiency in the books of accounts of the assessee nor have the books of accounts being rejected under section 145. Under the circumstances, the addition cannot be sustained." 5. Admittedly, the addition has been made on adhoc basis, the basis of making addition is not specified by the AO therefore, we do not see any reason to interfere in the finding of the learned C....
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.... of the trust. However, in the case of Lissie Medical Institution (348 ITR, 344), the Kerala. High Court has considered all the aforesaid decision is-and has come to a conclusion that where an assessee acquires an asset through application of income and also claims that amount as expenditure in its income and expenditure account, depreciation on such asset would not be allowable to the assessee. Notional statutory deductions like depreciation, if claimed as deduction while computing the income of the properly held under trust under the relevant head of income, is required to be added back while computing the income for the purposes of application in the income and expenditure account. Thus, depreciation claim in respect of assets which had been claimed as application of income in any prior year, will not be admissible to the assessee. Never the less, as stated by the Ld AR of the assessee during the appellate proceedings, the contention of the AO that the cost of the asset-in respect of which depreciation had been claimed, had been allowed in prior years, was factually incorrect. Only that portion of the cost of asset, which had been acquired during the years under consideration af....
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....is as on what basis such addition has been made. Learned counsel for the assessee has taken us through the assessment order and the finding of the learned CIT(A). 11. We have heard the rival contentions and perused the relevant material on record. We find that learned CIT(A) has categorically given a finding in para 8.2 as under:- 8.2 It is noted that there is no discussion in the body of the assessment order regarding the aforesaid disallowance. However, an addition has been made in the computation at the end of the assessment order and a narration has been given "Cheques presented, but not-cleared and hence, such expenses cannot be treated as application of income". At the appellate stage, it was clarified that at rib point in time was the appellant ever confronted with the said disallowance. Moreover, the issue sought to be raised, by the AO was purely legal in nature which did not require any fresh investigation/enquiry. Therefore, it was pleaded that the additional ground be admitted. Considering the submissions of the assessee and in view of the ratio of decisions of the Supreme Court in the cases of NTPC (229 ITR 383) and Jute Corporation of India (187 ITR 688), ....