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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN
: Mr.R.M.Narayanan, CA अपीलाथ' क* ओर से/ Appellant by : Mr.S.Nataraja, JCIT ()यथ' क* ओर से /Respondent by : सुनवाई क* तार"ख/Date of Hearing 15.02.2018 घोषणा क* तार"ख / : 15.02.2018 Date of Pronouncement आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:
ITA No.1710/Chny/2016 is an appeal filed by the assessee against the Order of Commissioner of Income Tax (Appeals)-17, Chennai, in dated 27.02.2015 for the AY 2009-10. 2.0 Shri S.Nataraja, JCIT, represented on behalf of the Revenue and Shri R.M.Narayanan, CA, represented on behalf of the assessee. :- 2 -:
3.0 In regard to Ground Nos.1 to 6, it was submitted by the Ld.AR that the issue was against the action of the Ld.CIT(A) in not allowing the depreciation claimed in respect of the assets. It was a submission that the assessee is a Charitable Trust, which was claiming the benefit u/ss.11 & 12 of the Act. It was a submission that the issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of Rajasthan & Gujarati Charitable Foundation, Poona, reported in 89 taxmann.com 129 (SC), wherein, the Hon’ble Supreme Court held as follows:
Even if the entire expenditure incurred for acquisition of capital asset is treated as application of income for charitable purposes u/s.11(1)(a) of the Act, the assessee is also entitled for depreciation u/s.32 3.1 In reply, the Ld.DR vehemently supported the order of the AO & the Ld.CIT(A).
3.2 We have considered the rival submissions.
3.3 As it is noticed that the issue of depreciation in respect of the assets, on which, the claim of application has been made, is, now, squarely covered by the decision of the Hon’ble Supreme Court in the case of Rajasthan & Gujarati Charitable Foundation, Poona, respectfully following the decision of the Hon’ble Supreme Court in the case of Rajasthan & Gujarati Charitable Foundation, Poona, the findings of the Ld.CIT(A) and that of the AO is reversed and the AO is directed to grant :- 3 -: the assessee, the benefit of depreciation as claimed. Consequently, Ground Nos.1 to 6 of the assessee’s appeal are allowed.
4.0 In regard to Ground Nos.7 to 9, it was submitted by the Ld.AR that the issue was against the action of the Ld.CIT(A) in not quantifying the carry forward of the excess application of the earlier years for set off against the possible surplus in the subsequent years. It was a submission that the issue was squarely covered by the decision of the Hon’ble Jurisdictional High Court of Madras in the case of M/s.Medical Trust of the Seventh Day Adventists in TCA Nos.844, 845, 848, 849, 1079 of 2010 dated 08.08.2017 as also the decision of the Hon’ble Jurisdictional High Court of Madras in the case of Matriseva Trust, reported in [2003] 128 Taxman 261 (Mad.), wherein, it has been held as follows:
5. With regard to the second question, the Tribunal has held that the trust is entitled to set off the amount of excess application of the last year against the deficiency of Rs. 82,516 of the present assessment year.
When similar questions came up before the Rajasthan High Court and the Gujarat High Court in the case of CIT v. Maharana of Mewar Charitable Foundation [1987] 164 ITR 439 and CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal [19951 211 ITR 293, respectively, both the Rajasthan High Court and the Gujarat High Court have answered the questions in favour of the assessee and against the Revenue. 7. Following the aforesaid decisions of the Rajasthan and Gujarat High Courts, we answer the second question referred to us in favour of the assessee and against the Revenue.
4.1 In reply, the Ld.DR vehemently supported the order of the AO & the Ld.CIT(A).
4.2 We have considered the rival submissions. :- 4 -:
4.3 As it is noticed that the issue is, now, squarely covered by the decision of the Hon’ble Jurisdictional High Court in the case of Matriseva Trust, referred to supra, respectfully following the decision of the Hon’ble Jurisdictional High Court in the case of Matriseva Trust, the AO is directed to grant the assessee, the benefit of the carry forward of excess application. Consequently, Ground Nos.7 to 9 of the assessee’s appeal are allowed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the Open Court on February 15, 2018, at Chennai. (एस जयरामन) (जॉज" माथन) (S. JAYARAMAN) (GEORGE MATHAN) लेखा सद य/ACCOUNTANT MEMBER "या"यक सद य/JUDICIAL MEMBER