DCIT,(EXEMPTION), CIRCLE-2,, AHMEDABAD vs. CHAROTAR EDUCATION SOCIETY,, ANNAD

Common grievance of the Revenue in both the assessment years relates to allowance of depreciation amounting to Rs.2,04,91,801/- and Rs.2,39,88,849/- in the Asstt.Year 2010-11 and 2014-15 respectively by the ld.CIT(A).

Brief facts of the case are that the assessee has filed its return of income at Rs.NIL. The assessment under section 143(3) of the Income Tax Act was completed on 4.9.2010 determining total income at Rs.NIL. The AO thereafter haboured a belief that the assessee has claimed depreciation of Rs.2,04,91,801/- which is not admissible to it. Therefore, he reopened the assessment and notice under section 148 of the Act was issued to the assessee. In response to the show cause notice of the AO, the assessee filed submissions on 28.12.2015. It has contended that amendment in section 11 has been made by Finance Act(No.2) of 2014 w.e.f. Asstt.Year 2015-16. After this amendment, it has been provided that depreciation as well as capital expenditure in the shape of application of income cannot be claimed simultaneously; but upto Asstt.Year 2014-15 both were admissible to an assessee who is an institution engaged in charitable activities and enjoying the benefit of sections 11 and 12. References to a large number of decisions were made by the assessee, but the ld.AO was not satisfied with the explanation of the assessee. He disallowed the claim of depreciation on the ground that the assessee has already availed deduction for the capital expenditure for acquiring such assets as application of income.