THE DCIT (EXEMPTIONS), CIRCLE-2, AHMEDABAD vs. M/S. UDHNA ACADEMY EDUCATION TRUST, SURAT

Whether on the facts and in the circumstances of the case is the Ld. CIT(A) justified in allowing the assessee to accumulate 15% of income before allowance of income uls. 11(1)(a) of the Act. GROUNDNQ1: 3 Apropos ground No.1 , the Id. Departmental Representative (DR) submitted that the Id. CIT(A) was not justified in allowing depreciation of Rs. 91,11,766/- to the assessee which amount to double deduction as 100% deduction in this regard was already allowed to the assessee as an application of income The Id. Departmental Representative (DR) submitted that the order of the Id. CIT(A) may kindly be set aside by restoring that of the Assessing Officer(AO): 4 The Id. counsel for the assessee strongly supported the first appellate order and submitted that the AO disallowed claim of depreciation of Rs. 40,67,527/-and the same was deleted by the Id. CIT(A) by following the ratio of the decision of Hon'ble High Court of Gujarat in the case of CIT v. Sheth Manilal Ranchhoddas Vishram Bhavan Trust 198 ITR 598 (Guj), therefore, conclusion drawn by the first appellate authority may kindly be upheld. 3 ITA No.732/AHD/2O17/SRT (A.Y: 2012-13) M/s: Udhna Academy Education Trust 5. On careful consideration of above rival submissions we are of the view that the AO has disallowed claim of depreciation following the judgment passed by Hon'ble Supreme Court in the case of Escorts Ltd: V. Union of India [1993] 199 ITR 43 (SC): On careful analysis of the impugned first appellate order we find that the Hon'ble High Court of Punjab & Haryana has distinguished the judgment of Hon'ble Supreme Court in the case of CIT v Tiny Tots Education Society 330 ITR 21 (P&H): Further, in the case of Sheth Manilal Ranchhoddas Vishram Bhavan Trust (supra) their lordships speaking for the jurisdictional High Court held that having regard to the scheme of the income' referred to in s 11(1)a) of the Income Tax Act; 1961 ("the Act' for short) was not to be computed in accordance with the provisions of the Act; but in accordance with the normal rules of the accountancy under which the depreciation has to be allowed while computing such income Uls. 11(1)a) of the Act: We are unable to see any infirmity, perversity on any other valid reason to interfere with the conclusion drawn by the Id. CIT(A) in view of the ratio of decision of Hon'ble jurisdictional High Court in the case of Sheth Manilal Ranchhoddas Vishram Bhavan Trust (supra): Thus, we upheld the same. Accordingly, ground No.1 of the Revenue being devoid of merits is dismissed: GROUNDNO.2: 6 Apropos this ground, the Id. DR submitted that the first appellate authority was not correct and justified in accumulate 15% of income before exemption of same uls. 11(1)a) of the Act. The Id. Authorized ITA No.732/AHD/2017SRT (A.Y: 2012-13) M/s: Udhna Academy Education Trust Representative (AR) vehemently pointed out that the Id. CIT(A) was right in granting relief to the assessee by following the decision of Hon'ble Supreme Court in the case of CIT v. Programme for Community Organization 248 ITR 01 (SC): 7 On careful consideration and rival submissions from the para 6 and 6.1 of the first appellate order, we find that the Hon'ble Supreme Court in the case of Programme for Community Organization (supra) has held that the appellant would be allowed to accumulate 15% of total income after application of expenses. Therefore, we are unable to see any valid reason to interfere with the conclusion drawn by the Id. CIT(A) and thus we upheld the same: Accordingly , ground No.2 of the Revenue is also dismissed. 8 . In the result;, appeal of the Revenue is dismissed: Order pronounced in the open court on this day of 13th March, 2018. - (#iwvf (CM.GARG) (a1t d HH7) (O.P.MEENA) dr HarW/Accountant Member 7uifuq Hc 4IJudicial Member TRT Surat; fard5 Dated 13th March, 2018 EDN sduqjulfelft erfCopy of the Order_is forwarded to 1 aa1ff _ The Appellant; 2 Yyeff The Respondent; 3. 3114o6r 3rydr(ardildd) The CIT; 4. faurfly WAfu, 3aor edleity afua3RUl, ta DR, ITAT; Surat; TR w7& Guard file. 38RITTHRI BY ORDER 7rri4a %a //ll Tenyd Tiar Assistant Registrar 31d6r eiafly &fedru, TRT ITAT; Surat