AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1222
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.... brevity, we would like to dispose of all three appeals by way of a common order. 2. First of all, we would like to deal with ITA No. 611/Ahd/2018. There is a delay of 65 days for filing of appeals on behalf of the assessee in support of its contention, the appellant has filed an affidavit of its staff giving reason for delay for filing of appeals. We are satisfied with the reasons given by the appellant and would like to condone the delay and proceed with the appeal. 3. Appellant has taken solely ground that ld. CIT(A) has erred in giving guidelines to the A.O. for giving allowance of deficit and requested that appeal to be decided on the basis of the ground raised that the direction and guidelines cannot be given in what manner such d....
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....ced on the decision of the hon'ble Supreme Court In the case of Escorts Ltd vs Union of India (1993) 199 ITR 43 wherein it was held by the apex court that when deduction u/s 32 (iv) was allowed in respect of capital expenditure as Scientific Research, no depreciation was to be allowed u/s 32 of the I. T act in the same asset. 4.3 In the case of Lissie Medical Institutions V/s. Commissioner of Incometax, Kochi, 348 ITR 344, the hon'ble High Court of Kerala has held that When the expenditure incurred for acquisition of depreciable assets itself is treated as application of income or charitable purpose u/s. ll(l)(a), should not the cost of such assets to be treated as nil for the assessee and in that situation depreciation to be gran....
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....nt to double deduction. In view of the above fact and judicial pronouncement, the claim of depreciation of Rs. 1,33,657/- is disallowed and added back to the total income of the assesses. 5. Against the order of the ld. A.O., assessee preferred first statutory appeal before the ld. CIT(A) who directed the A.O. to verify and allow quantum of deficit to be set off against income of assessment year 2014-15 in following manner: "If the appellant has applied more than the income during the year then A.O. is directed to allow carry forward of deficit of that year to be set off against future income of the appellant (Reliance placed on the judgment of Hon'ble Gujarat High Court in the case of CIT vs Sri Plot Swetamber Murtipijak Jain Mand....
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....me shall precede accumulation." Based on the above referred guideline A.O. is hereby directed to allow the set off of deficit of earlier year to be adjusted against income of current year." 6. Against the order of the ld. CIT(A), assessee preferred appeal before us stating that ld. CIT(A) cannot direct the A.O. that how deficit is to be allowed. And in support of its contention, ld. A.R. cited a judgment of Hon'ble Supreme Court in the matter of CIT vs. Programme For Comminity Organisation wherein in similar circumstances, appeal of the Revenue was dismissed and the relief was granted to the assessee: "The question that really requires consideration is whether, for the purposes of section 11(l)(a) of the Income-tax Act, 1961, the am....
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....at basis the Revenue contended that it was entitled to accumulate only twenty-five per cent, of Rs. 87,010. For the aforesaid reasons, the civil appeal is dismissed. No order as to costs. 7. Thus, respectfully following the judgment of Hon'ble Supreme Court in the aforesaid matter, we allow the appeal of the assessee. 8. In the result, appeal filed by the Assessee is allowed and direct the A.O. to allow the deficit @ 15%. 9. Now we come to ITA No. 2186/Ahd/2018 wherein assessee has taken following grounds of appeal: "The learned CIT(A) has erred in confirming the calculation of deficit as per the excel sheet passed by AO under Section 250 in as much as the appeal was preferred only for A.Y. 2014-2015 whereas the effect is giv....
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....the income so accumulated or set apart is not in excess of twenty-five per cent, of the income from such property." Having regard to the plain language of the above provision, it is clear that a charitable or religious trust is entitled to accumulate twenty-five per cent, of its income derived from property held under trust. For the present purposes, the donations the assessee received, in the sum of Rs. 2,57,376, would constitute its property and it is entitled to accumulate twenty-five per cent, thereout. It is unclear on what basis the Revenue contended that it was entitled to accumulate only twenty-five per cent, of Rs. 87,010. For the aforesaid reasons, the civil appeal is dismissed. No order as to costs. 11. Now we come to ....