SHRI.VISHWANATH RAGHUNATH RAO DESHPANDE MEMORIAL TRUST,BANGALORE vs. INCOME TAX OFFICER, BANGALORE

This appeal by the assessee is directed against the order dated 24.11.2016 of CIT(A) for the assessment year 2012-13. The assessee has raised the following grounds:

The only issue arises in this appeal of the assessee is regarding disallowance of deprecation on the ground that it would amount to double deduction. The assessee is a charitable trust registered u/s. 12A of the IT Act. The AO while completing the assessment u/s. 143(3) has inter alia disallowed the claim of depreciation of Rs. 24,09,073/- on the ground that when the said expenses was already allowed as application of income then the depreciation would amount as double deduction. The assessee challenged the action of the AO before the CIT(A). The CIT(A) though on principle accepted the claim of the assessee however it was restricted to Rs. 16,89,073/- by reducing the corpus donation amount of Rs. 7,20,000/- received during the year.

Before the Tribunal, the ld. AR of the assessee has submitted that this issue is covered in favour of the assessee by the decisions of jurisdictional Page 4 of 19 High Court as well as this Tribunal. He has relied upon the decision dated 20.05.2016 of this Tribunal in case of ACIT Vs Vishwachetan Foundation IBMR in ITA No. 957/Bang/2015. On the other hand, the ld. AR has submitted that the decision of the Hon’ble jurisdictional High Court has not attained finality as the SLP filed by the revenue has been admitted by the Hon’ble Supreme Court for deciding the matter on merits. He has relied upon the order of the CIT(A).

Having considered the rival submissions as well as relevant material on record, it is noted that this issue is covered by the decisions of the jurisdictional High Court and by following the said decision the coordinate bench of the Tribunal has dealt with this issue in case of ACIT Vs Vishwachetan Foundation IBMR (supra) in para 6 to 9 as under: “

Even otherwise the CIT(A) has allowed the claim of the assessee in principle by following the various decisions of Hon’ble High Courts however the claim was restricted by reducing the amount of corpus Page 19 of 19 donation of Rs. 7,20,000/-. On perusal of the impugned order of the CIT(A) it is found that there is no basis of restricting the claim of depreciation by reducing the said amount of corpus donation if the claim of depreciation is in respect of the cost of the assets. Accordingly, by following the earlier order of this Tribunal the claim of the assessee is allowed.

In the result the appeal of the assessee is allowed.