BREACH CANDY MEDICAL RESEARCH CENTRE,MUMBAI vs. INCOME TAX OFFICER EXEMPTION WARD 1(1), MUMBAI, MUMBAI

On facts and circumstances of the case and in law, the learned Additional/Joint CIT(A) erred in confirming the action of the learned Assessing Officer (the learned 'AO') of denying the claim of depreciation of the Appellant amounting to Rs. 3,04,850. 2. On facts and circumstances of the case and in law, the learned Additional/Joint CIT(A) has erred in confirming the action of the learned AO of not appreciating that claim of depreciation of the Appellant amounting to Rs. 3,04,850 has been made in respect of assets, the acquisition of which has not been claimed as an application of income in any previous year.

On facts and circumstances of the case and in law, the learned Additional/Joint CIT(A) has erred in confirming the action of the learned AO of not directing to carry forward the excess application of income of Rs. 5,66,396 to subsequent years.

The Ld. AR of the appellant has argued that both the Ld. AO and Ld. CIT(A) have wrongly proceeded on the presumption that that appellant is a Trust registered after getting approval under section 12A of the I.T.Act and Breach Candy Medical Research Centre

During the hearing before the ITAT, Ld. AR of the appellant has mentioned that it is entitled to claim depreciation on the assets as a valid application of income towards the advancement of its objects. Moreover, Ld. AO went on a wrong presumption that purchase value of capital asset was treated as application of income and again claimed depreciation which is double deduction, it was argued. The Ld. AR of the appellant has argued that they did not claim purchase value of asset as deduction anywhere.

The Ld. DR relied on the assessment order and Ld. CIT(A) order.

Heard both sides. The Bench decides that the Ld. AO went on a wrong presumption that the appellant is a trust registered under 12A, whereas the fact is that it is an institution which was approved research association under section 35(1)(ii) of the Act and notified as above. Since the appellant is not registered under section 12A, and approved under 35(1)(ii), provisions of section 11& 12 of the Act are not applicable. As the appellant institution argues that it has not claimed the purchase value of asset as revenue expenditure and hence the Ld. AO cannot disallow depreciation of Rs. 3,04,850/- as double deduction. If the appellant institution has not claimed the purchase value of asset as deduction/revenue expenditure, the appellant is entitled to depreciation. The AO is directed accordingly. Hence, the appellant succeeds in this appeal and Ld. AO is directed to delete the addition relating to depreciation.

The last ground taken by appellant is that the Ld. AO did not mention anything with respect to carry forward of deficit. The appellant has submitted that it is entitled to claim for carry forward deficit is founded on well settled legal principles enunciated by various judicial pronouncements as set out below :- a) CIT vs. Institute of Banking Personnel Selection (264 ITR 110) (Bom HC) b) CIT vs. Maharana of Mewar Charitable Foundation (164 ITR 439) (Raj Anyhow, the Ld. AO is directed to take the submissions and cases-law cited above and if the institution is entitled for carry forward deficit of Rs. 8,71,246/-, the benefit should be allowed.

The appeal of appellant is allowed for statistical purposes.

The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.