TaxTMI 
TaxTMI 
2019 (12) TMI 36
X X X X Extracts X X X X
X X X X Extracts X X X X
....utions not to be run for purposes of profit. The Charitable Trust is registered i/s. 12A vide M. No. DIT(E)/8E/437/2001-2002 dated 11/04/2002. The assessee runs a school at Baguihati within Kolkata having a primary and junior high school in one campus and a secondary [ICSE] & H.S [ISC] School in another campus. The schools are affiliated with the Council for the Indian School Certificate Examinations from 1998 and 2001 respectively and the affiliation is continuing. The assessee has started another school at Ranchi and also purchased land for starting third school at Madhubani, a backward district of Bihar. The total strength of students are above 3000 and the staff strength is exceeding 200. Students from the schools after securing high marks are pursuing higher study in different streams. The trust was granted approval u/s. 10(23C)(vi) w.e.f. A.Y. 2013-14. The CIT(E), vide Order dated March, 10, 2016, cancelled registration u/s. 12A w.e.f. 01/04/2016 and also withdrew the approval granted u/s. 10(23C)(vi) vide order dated March, 10, 2016. The registration u/s. 80G(5) was also cancelled by the Ld. CIT(E) vide his order dated 14/03/2016 with retrospective effect from 01/04/2006. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e has preferred this appeal. 5. We have heard rival submissions and gone through the facts and circumstances of the case. We note that it was brought to the notice of the Ld. CIT(A) that during the year under consideration, the assessee's total claim of depreciation was to the tune of Rs. 19,69,870/- which was included in the total application of amount to the tune of Rs. 2,59,67,667/-. It was brought to our notice that out of the total claim of depreciation of Rs. 19,69,870/-, since the assets acquired during the year was to the tune of Rs. 4,65,859/-, it was allowed by the AO; and because the balance depreciation pertained to the assets which were acquired in earlier years and the cost of which has been deducted as application for charitable purpose in earlier years, it was denied by AO which action has been upheld by Ld. CIT(A). According to the assessee, the assets for which depreciation has been claimed were acquired in earlier years the cost of which has been fully shown as application of income in earlier assessment still, it is an allowable deduction on the following grounds: "That for the purpose of determining the income of charitable trust eligible for exempt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t at Calcutta in the case of CIT - Vs- Siliguri Accumulated Market Committee Report in (2014) 366 ITR 51(Calcutta) has allowed depreciation, in the similar facts of the case. It is respectfully submitted that precedent and judgment of Jurisdictional Hon'ble High Court at Calcutta should be followed in the State of West Bengal, and depreciation as such should be allowed. It is submitted that I have already filed a copy of the judgment in the matter of Director of Income Tax (Exemption) - Vs- Medical Trust of the 7th day Adventists Reported in (2017) 398 ITR 721 Madras. In the said case the Hon'ble Madras High Court considered all the judgments passed post amendment of Section 11 including the judgment of the Hon'ble High Court at Calcutta and after considering particular judgment Kerala High Court in the matter of Lissie Medical Institution - Vs- CIT (2012) 348 ITR 344 (Kerala) which is not in favour of the assessee still the Hon'ble Madras High Court allowed the claim of depreciation of the assessee. In this connection it may be further considered that the judgment of the Jurisdictional High Court at Calcutta has been passed after the said judgment of the L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mmissioner 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 CIT v. Munisuvrat Jain 1994 Tax Law Reporter, 1084 the facts were as follows. The assessee was a Charitable Trust. It was registered as a Public Charitable Trust. It was also registered with the Commissioner of Income Tax, Pune. The assessee derived income from the temple property which was a Trust property. During the course of assessment proceedings for assessment years 1977-78, 1978-79 and 1979-80, the assessee claimed depreciation on the value of the building @2½% and they also claimed depreciation on furniture @ 5%. The question which arose before the Court for determination was : whether depreciation could be denied to the assessee, as expenditure on acquisition of the assets had....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase of Director of Income-tax (Exemption) v. Framjee Cawasjee Institute [1993] 109 CTR 463. In that case, the facts were as follows: The assessee was the Trust. It derived its income from depreciable assets. The assessee took into account depreciation on those assets in computing the income of the Trust. The ITO held that depreciation could not be taken into account because, full capital expenditure had been allowed in the year of acquisition of the assets. The assessee went in appeal before the Assistant Appellate Commissioner. The Appeal was rejected. The Tribunal, however, took the view that when the ITO stated that full expenditure had been allowed in the year of acquisition of the assets, what he really meant was that the amount spent on acquiring those assets had been treated as 'application of income' of the Trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing income from those assets in subsequent years, depreciation in respect of those assets cannot be taken into account. This view of the Tribunal has been confirmed by the Bombay High Court in the above judgment. Hence, Question No. 2 is covered by the decision of t....