TaxTMI 
TaxTMI 
2016 (8) TMI 1405
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is no amount accumulated/set apart within the meaning of section 11(2) in last 10 years and there is no such income under section 11(2) for which Form-l0 required. 3. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 43,48,792/- whereas the Ld. Commissioner of Income Tax(Appeals) has himself observed in his order that it is a fact that the assessee has not produced Form No. 10 and Form No. 10B during the course of assessment proceedings. 4. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 8,13,513/- made by the Assessing Officer on account of depreciation whereas the assessee has already claimed 100% deduction towards capital expenditure at time of acquiring capital assets, therefore, the claim of double deduction on account of depreciation of Rs. 8,13,513/- was not allowable. 5. The order of Ld. CIT(A) be cancelled and the order of the AO be restored. 6. Appellant craves leave to modify/amend or add anyone or more grounds of appeal." 2. The facts in brief borne out from the record are that the assessee society is registered u/s.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the view that Form 10 and Form 10B were duly submitted for accumulation of income u/s. 11(2) before completion of assessment proceedings, therefore no addition was called for. Accordingly he deleted the additions. The relevant observations of the CIT(Appeals) is extracted hereunder for the sake of reference:- "5.1 The AO has mainly made this addition for the reason that Form 10 and Form 10B were not submitted for accumulation of profit u/s. 11(2) of the Act. 5.2 The return was filed before ITO-I, Bahraich and notice u/s 143(2) was issued by ITO-I, Bahraich. Subsequently the return was transferred to ITO(exemption), Lucknow. 5.3 In the present case form No. 10 was filed before ITO-I, Bahraich on 26.06.2013. The Form No. 10 and Form No. 10B were filed before the undersigned during the course of appellate proceedings. The form No.10 mentions that an amount of Rs. 35,29,964/- should be accumulated apart till the previous year ending on 2017-18. It is also a fact that appellant could not produce from No. 10 and 10B during the course of assessment proceedings. The appellant has relied on judgement of Hon'ble Gujrat High Court in case of CIT vs. Mayur Foun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he course of appellate proceedings. Thus the Form No. 10 and Form No. 10B were duly submitted for accumulation of profit u/s 11(2) of the Act before the completion of the assessment proceedings. The addition is hereby deleted. The grounds of appeal No. 1,2 and 3 are allowed." 5. Aggrieved, the revenue has preferred appeal before the Tribunal assailing the order of CIT(Appeals), whereas the ld. Counsel for the assessee, besides placing reliance on the order of CIT(Appeals), has contended that notice for accumulation of fund was duly given to the AO, therefore no disallowance can be made. Our attention was also invited to Form 10 submitted to the assessing authority on 26.6.2013 along with copy of Resolution passed by the Advisory Committee of the society. Copy of Form 10 is also placed on record. 6. Having carefully examined the order of lower authorities in the light of rival submissions, I find that assessee has given a notice of accumulation of funds, but the AO did not take cognizance of this fact and has made the addition; whereas the CIT(Appeals) has examined the issue in detail in the light of various judicial pronouncements and since I do not find any infirmity in the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Delhi HC) wherein it was held that claim of depreciation should be allowed as per principle related to commercial accounting when computing business income. B. CIT Vs. The Society of Sister of St. Anne.(Karnataka HC) C. Hon'ble ITAT Lucknow B Bench in the case of ACIT Vs. Saraswati Gyan Mandi Siksha Sansthan(2014) 50 Taxman held that depreciation is allowable even on assets whose entire cost has been allowed as deduction by way of exemption u/s 11. Depreciation is the exhaustion of effective life of a fixed asset owing its 'use' or obsolescence. It is computed as that part of the cost of asset which will not be recovered when the asset is put to use. At the end of the effective life the asset ceases to earn revenue. Depreciation is nothing but decrease in value of property through wear deterioration or obsolescence. If Depreciation is not allowed as necessary deduction for computing the income of charitable institutions, then there is no way to preserve the corpus of the trust for deriving the income (Held by Karnataka HC in CIT Vs. Society of sister of St. Anne).The various judgement cited above, especially judgement of Hon'ble Delhi HC i....