2019 (2) TMI 236

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..... 80,66,227/- to the assessee ignoring the fact that the assessee has claimed the amount incurred on purchase of assets in earlier years as application of income, on which depreciation is claimed now and further allowance of depreciation will be tantamount to double deduction. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the claim of depreciation of Rs. 80,66,227/- to the assessee in view of the recent decision of the Hon'ble Delhi High Court in the case of DIT(E) Vs. Charanjiv Charitable Trust Dated 18-03-2014 3. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing." 2. Briefly stated facts of the case are that in the a....

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....it is not only illegal but also immoral and unethical to claim depreciation on the capital assets as the entire capital expenditure has been claimed as a deduction and as application of income u/s 11(1) and as such there is no merit in the submissions of the assessee but the appeal of the assessee is allowed regarding the claim of depreciation in view of the latest order of the Hon'ble Delhi High Court." 2.1 Aggrieved, the Revenue is in appeal before the Tribunal, raising the grounds as reproduced above. 3. Ld. DR relied on the order of the Assessing Officer and submitted that in view of the decision of the Hon'ble Delhi High Court in the case of DIT(Exemption) Vs. Charanjiv Charitable Trust, IT Appeal No. 321 to 323 of 2013, order d....

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....s have accepted the decision of the ITAT thereby dismissing the appeals of the Income Tax Department. From the judgments of the High Courts, it can be discerned that the High Courts have primarily followed the judgment of the Bombay High Court in 'Commissioner of Income Tax v. Institute of Banking Personnel Selection (IBPS)' [(2003) 131 Taxman 386 (Bombay)]. In the said judgment, the contention of the Department predicated on double benefit was turned down in the following manner: 3. As stated above, the first question which requires consideration by this Court is: whether depreciation was allowable on the assets, the cost of which has been fully allowed as application of income under section 11 in the past years? In the case of ....

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..... In that matter also, a similar argument, as in the present case, was advanced on behalf of the revenue, namely, that depreciation can be allowed as deduction only under section 32 of the Income Tax Act and not under general principles. The Court rejected this argument. It was held that normal depreciation can be considered as a legitimate deduction in computing the real income of the assessee on general principles or under section 11(1)(a) of the Income Tax Act The Court rejected the argument on behalf of the revenue that section 32of the Income Tax Act was the only section granting benefit of deduction on account of depreciation. It was held that income of a Charitable Trust derived form building, plant and machinery and furniture was li....