CIT KARNAL vs. MARKET COMMITTEE, ASSANDH

This order shall dispose of ITA Nos. 253 to 259 of 2010 as it is stated that identical questions are involved in all the appeals.

ITA No. 253 of 2010 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against order dated 29.5.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench “F”, Delhi in ITA No. 2633/DEL/2008 for the assessment year 2005-06 proposing to raise the following questions of law:- i) Whether on the facts, and in the circumstances of the case, the Income-Tax Appellate Tribunal was justified in holding that depreciation was allowable on the capital asset, when deduction for capital expenditure incurred for acquisition -2- of these capital assets has already been allowed as application of income of the trust? ii) Whether the ITAT's decision to allow double deduction on depreciation when capital expenditure on the asset has already been allowed is justified in the light of the apex Court's decision in Escorts Ltd. Vs. UOI (199 ITR 43) to the effect that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure? iii) Whether on the facts and in the circumstances of the case, the Ld. ITAT was justified in restoring the issue to the file of the Assessing Officer to allow set off of brought forward unabsorbed depreciation and losses of earlier years, despite the fact that depreciation per se is not allowable on capital assets when deduction for capital expenditure has already been allowed as application of income in earlier years and when the provisions of sections 70 to 80 of the Income-tax Act have not specifically provided for carry forward and set off of losses or unabsorbed depreciation in the case of income assessed u/s 11 to 13 of -3- the Act? iv) Whether on the facts and in the circumstances of the case, the Ld. ITAT was justified in directing the AO to consider the excess amount of application of income of previous years to be adjusted in the current year, despite there being no provision in Section 11 to 13 of the Act in this regard and despite the fact that the ratio of the decision of the Hon'ble Rajasthan High Court in Maharana of Mewar Charitable Foundation (164 ITR 439) is not applicable to this juri iction? v) Whether on the facts and in the circumstances of the case, the Ld. ITAT was justified in allowing payment of 30% of market fees earned by it paid to the Haryana Agriculture Marketing Board as application of income for charitable purpose, despite the finding that 30% of the market fee has to be paid to the said Board as a statutory obligation under the Agricultural Marketing Board Act, and therefore, it is not application of income, but it is sharing of income by an overriding title as per the Act by which the Market Committee is governed?”

Learned counsel for the revenue fairly states that the -4- matter is covered against the revenue by order of this Court dated 28.7.2010 in ITA No. 238 of 2010 (The Commissioner of Income-tax v. Market Committee, Karnal).

In view of the above, these appeals are dismissed.

A photo copy of this order be placed on the files of the connected cases. (ADARSH KUMAR GOEL) JUDGE July 29, 2010 (AJAY KUMAR MITTAL) gbs JUDGE