AI Drafter 
TaxTMI 
TaxTMI 
2015 (9) TMI 1645
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....g the appeal of the assessee on account of disallowing depreciation on fixed assets of Rs. 57,29,927/- in contravention of the decision of Escorts Ltd vs. UOI 199 ITR 43 wherein it was held that since section 11 of the Income Tax Act, 1961 provides for deduction of capital expenditure incurred on assets acquired for the objects of the trust as application and does not specifically and 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 case and in law, the Ld....
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....xpress provision in the IT Act, 1961 permitting allowance of such claim." 2. Briefly stated relevant facts of the case are that the assessee, who is a charitable trust, filed the return of income declaring the total income of Rs. Nil. During the assessment, AO observed that assessee claimed (i) an amount of Rs. 57,29,927/- on account of „depreciation on assets‟ and (ii) Rs. 65,41,073/- was claimed as set-off of earlier years deficit against the income of the year under consideration. For making above claims, assessee relied on the ratio laid down in the judgment of the Hon‟ble Supreme Court in the case of Escorts Ltd vs. Union of India and the judgment of the jurisdictional High Court in the case of CIT vs. Institute of....
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.....7 to 3.10 of the impugned order, the same are extracted as under: "3.7. I have also perused the order in the case of the appellant for the AY 2005-06 vide appeal no. CIT(A)-I/IT-E1(81)/2011-12, wherein Ld CIT (A) has allowed depreciation as well as carry forward of losses. Similar decision has been given by the Ld CIT (A) in the case of the appellant for AY 2009-2010 vide appeal no. CIT(A)-1/IT-E1(6)/2011-12. Since, the facts in the current year are identical, I find no reason to differ from the above decisions of the Ld CIT (A). 3.8. Further, it is seen that the issue under consideration is covered in favour of the assessee by other decisions and also it has been held by various courts that depreciation is to be allowed ....
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....ramjee Cawasjee Institute (supra), has held that even if the amount spent on acquiring depreciable asset was treated as application of income of the trust in the year of acquisition, depreciation would still be allowable in subsequent years. This decision of the Hon‟ble Bombay High Court was followed in CIT vs. Institute of Banking Personnel Selection (supra) and CIT vs. Sanjeevan Vidyalaya Trust (supra). Hence, I direct the AO to delete the disallowance of depreciation of Rs. 1,14,71,022/- in AY 2010-2011 and Rs. 68,89,365/- in AY 2011-2012." 7. From above, it is very clear that the judgment of Apex Court in the case of Escorts Ltd (supra) relied on by the AO while making the disallowance is not applicable to a charitable organiza....
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....peal. 9. During the proceedings before the Tribunal, Ld DR relied on the order of the AO. 10. On the other hand, Ld Counsel for the assessee heavily relied on the order of the CIT (A) and reiterated the submissions made before the lower authorities. On hearing the Ld Representatives of both the parties and on perusal of the orders of the Revenue Authorities in general and paras 4.3 and 4.4 of the CIT (A)‟s order in particular, I find the same are relevant in this regard. Considering the significance of the said paras 4.3 and 4.4 of the impugned order are extracted as under: "4.3. I have perused the order of the appellant for AY 2005-06 vide appeal no. CIT (A)-I/IT-E1(81)/2011-12 and also noted that the Ld CIT (A) has....