TaxTMI 
TaxTMI 
2015 (5) TMI 1197
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....ble deduction in respect of the same expenditure. According to the Revenue, doing so would be contrary to the principles laid down by the Hon'ble Supreme Court in the case of Escorts Ltd., 199 ITR 43. 3. The CIT(Appeals), on the above issue, following the decision of the Hon'ble High Court of Karnataka in CIT v. Society of Sisters of St. Anns, 146 ITR 28, held that deduction claimed by the assessee had to be allowed. Aggrieved by the order of CIT(Appeals), the Revenue has preferred the present appeal before the Tribunal. 4. The assessee is a charitable trust. In the course of assessment u/s. 143(3) of the Act for AY 2008-09 the AO noticed from the details of depreciation claimed, that the depreciation was claimed on assets, the cost of acquisition of the said assets had been claimed by the assessee as capital expenditure towards application of funds towards the objects of the trust and allowed as such. According to the AO, allowing such a claim would amount to allowing double deduction. On the facts of the present case, he was of the view that the decision of the Hon'ble Supreme Court in the case of Escorts Limited & another Vs. Union of India 199 ITR 43 is squarely applicable,....
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....pra). The CIT(A), however, allowed the claim of assessee. On further appeal by the Revenue, the Tribunal held as follows:- "20. We have considered the rival submissions. If depreciation is not allowed as a necessary deduction for computing income of charitable institutions, then there is no way to preserve the corpus of the trust for deriving the income as it is nothing but a decrease in the value of property through wear, deterioration, or obsolescence. Since income for the purposes of section 11(1) has to be computed in normal commercial manner, the amount of depreciation debited in the books is deductible while computing such income. It was so held by the Hon'ble Karnataka High Court in the case of CIT Vs. Society of Sisters of St. Anne 146 ITR 28 (Kar). It was held in CIT vs. Tiny Tots Education Society (2011) 330 ITR 21 (P&H) , following CIT vs. Market Committee, Pipli (2011) 330 ITR 16 (P&H) : (2011) 238 CTR (P&H) 103 that depreciation can be claimed by a charitable institution in determining percentage of funds applied for the purpose of charitable objects. Claim for depreciation will not amount to double benefit. The decision of the Hon'ble Supreme Court in the case of E....
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....as been claimed as an application of income under this section in the same or any other previous year." 10. As already stated, the aforesaid amendment is prospective and will apply only from A.Y. 2015-16. In view of the above legal position, we are of the view that the order of the CIT(A) does not call for any interference. Consequently the appeal by the Revenue is dismissed. ITA No.72/Bang/2015 (AY 2009-10) 11. As far as this appeal is concerned, the first ground of appeal is identical to the only ground of appeal raised in ITA No.71/Bang/2015. For the reasons stated therein while deciding similar grounds for AY 2008-09, we hold that there is no merit in these grounds raised by the Revenue. 12. Grounds No. 2 & 3 raised by the Revenue are as follows:- "(2) Disallowance of accumulation of income u/s 11(2):- i) The CIT(A) has erred in allowing accumulation of income u/s 11(2) without considering the fact that though the original Form no. 10 was filed within the due date but such Form no. 10 is not valid as the assessee had failed to declare the specific purposes for which income was accumulated. ii) The CIT(A) has erred in considering the revised Form no. 10 dated 11....
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....nce it ended with "and". Thereupon the Assessee filed copy of the resolution of the association verified and it was found therein that the purpose of the accumulation was as under:- "1) Stadium infrastructure 2) Promotion/ Development of cricket" 14. According to the AO, the specific purpose of accumulation is worded differently in Form 10 and resolution. Secondly the specification in Form-10 as "Infrastructure Development" or "Promotion/ Development of Cricket" or "Promotion of Cricket Activities" was very general in nature. Hence the AO disallowed the claim of the Assessee for accumulation of income claimed by the assessee u/s 11(2) of the IT Act for an amount of Rs. 19,33,54,169 and brought the same to tax. 15. The assessee had also claimed accumulation of income u/s 11(1)(a) at the rate of 15% of the gross receipts i.e Rs. 7,31,25,661/-. The AO referred to CBDT in the Circular No. 12 P,XX-7 dated 26/11/1968. CBDT wherein it has been clarified that if a trust fails to apply 85% of its income in the previous year, then the entire income accumulated would be liable to assessment under Sec.11(3). In other words the circular states that the entire accumulation and not mere....
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.... under the object Stadium Infrastructure there are about 16 specific proposes and as regard to the object of Promotion / Development of Cricket there are about 9 specific purposes the accumulation is sought and the intention of the appellant is very specific in the revised form No. 10 is concerned. It is settled law that an application can be made at any time before the completion of assessment. There are several instances when audit report and certificate have been held to be not directory and could be filed even at the appellate stage. It is well settled law by the decision of the apex court in the case of CIT Vs. Kanpur Coal Syndicate, 53 ITR 225 that the powers of the appellate authority are coextensive with that of the assessing authority. The appellant in the instant case has filed the form No 10 as a matter of abundant caution before me and the same is in detail and the claim of Rs. 19,33,54,169 is to be allowed. The reasons given by the assessing officer that there is and after the two purposes in the resolution and not in the Form 10 is not of much significance. The same has been explained as typo error by the appellants. Taking into account the totality of the situation t....
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....tation of l5% of the income to be accumulated of the income of the Trust and there is no specification as regard to the filing of any form for such accumulation of l5% of surplus. Whereas, as per the provisions of section 11(2) of the Act is concerned if any income referred to in clause (a) or (b) of sub-section (1) read with Explanation to that sub-section is not applied during the previous year but the same can be accumulated and set apart, either in whole or in part in the future period then the appellant as per Rule 17 can set apart and thereby it has to file Form No. 10 for such unutilized income which has not spent 85% of such income. 10.4 From the above it is clear that the sub-sections contained in the provisions of section 11 of the Act is concerned operate independently and consequently the provisions of sub-section (1) and (2) of section 11 are to be worked out separately. The A.O. is not correct in denying the benefit under section 11(1)(a) of l5% amounting to Rs. 7,31,25,661/- of the Act. I hereby direct the A.O. to allow the claim of accumulation or set apart of 15% of income of Rs. 7,31,25,661/-. In the result this ground of appeal is allowed." 18. Aggrieved by ....