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सुनवाई क� तार�ख / Date of Hearing : 02-01-2017 घोषणा क� तार�ख / Date of Pronouncement : 13-01-2017 आयकर अ�ध�नयम, 1961 क� धारा 254(1) के अ�तग�त आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) Per Pawan Singh, J.M. �या�यक सद�य iou iou iou �संह के अनुसार: iou 1. The present appeal by Revenue u/s 253 of the Income-tax Act, 1961 (for short ‘the Act’) is directed against the order of ld. Commissioner of Income-tax (Appeals)-1, Mumbai (for short the CIT(A) dated 05.02.2015 for Assessment Year(AY) 2010-11. The Revenue has raised the following grounds of appeal:
1. Whether on the facts of the case and in law the Ld. CIT(A) erred in allowing the appeal of the assessee on account of disallowing depreciation on fixed assets of Rs. 70,55,379/- in contravention of the decision of Escorts Ltd., Vs. UOI 199 ITR 43 wherein it was held that since section 11 of the Income-tax Act provides for deduction capital expenditure incurred on assets acquired for the object of the trust as application, and does not. specifically & expressly provide for double deduction on account of depreciation on the same very assets acquired from such capital expenditure, no deduction u/s. 32 for the same or any other previous 'year in respect of that asset as it amounts to claiming a double deduction
2. Whether on the facts and in the circumstances of the case and in law the Ld. OIT(A) erred in allowing the capital, when the Delhi High Court in the case of Charanjiv Charitable Trust and Kerla High Court in. the case of Lissie Medical Institutions u/ s. CIT 76 DTR(Kar)372 has decided the issue in favour of the department after considering the decision of Hon'ble Supreme Court in the case of Escorts Ltd. (199 ITR 43)
3. Whether on the facts of the case and in law the Ld. CIT(A) erred in allowing the set off of carry forward of deficit will tantamount to double deduction on account of expenditure out of exempt income
4. The Appellant prays that the order of the Commissioner of Income- Tax (Appeals) 1, Mumbai be set aside and that of the Assessing Officer be restored.
2. Brief facts are that the assessee is a Charitable trust registered with the Charity Commissioner, Mumbai. The assessee is also having Registration u/s 12A of the Act. The assessee filed return of income for relevant AY on 27.09.2010. In the return of income, the assessee claimed the depreciation of Rs. 70,55,379/-. The assessment was completed u/s 143(3) on 28.02.2013. The Assessing Officer (AO) disallowed the depreciation. On appeal before the ld. CIT(A), the depreciation was allowed. Being aggrieved by the order of ld. CIT(A), the Revenue filed the present appeal before us.
We have heard ld. Departmental Representative (DR) for the Revenue and ld. Authorized Representative (AR) of the assessee. The ld. DR for the Revenue relied upon the order of AO. On the other hand, ld. AR of the assessee submits that the grounds of appeal
raised by Revenue are covered in favour of assessee by the decision of Co-ordinate Bench in assessee’s own case for AY 2009-10 in . It was further argued that the against the decision of Tribunal for AY 2009-10, the Revenue filed appeal before the Hon’ble High Court and the same was dismissed on 20.10.2016. The ld. AR of the assessee placed on record the copy of decision of Tribunal in assessee’s own case for AY 2009-10 and the order of Hon’ble Bombay High Court dated 20.10.2016.
4. We have considered the contentions of the both the parties and seen that the order of Co- ordinate Bench in assessee’s own case for AY 2009-10, wherein the Tribunal while relying upon the decision of earlier in assessee’s own case for AY 2007-08 and passed the following order:
“2. At the time of hearing before us, the AR pointed out that grounds no. 1, 2 & 3 are covered by the order of the Coordinate Benches Mumbai in in the assessee's own case in assessment year 2007-08 and also by the order of Hon'ble Bombay High Court in the case of DIT(Exmp) vs GKR Charities in ITA No. 2060 of 2012 dated 08.03.2013. The AR pointed out that the Coordinate Bench held,
We have carefully considered the facts and the rival contentions. In CIT vs. Institute of Banking (supra), the Bombay High Court held that while computing the income of a trust, both the capital expenditure on acquisition of assets and the depreciation on the said assets were allowable, the capital expenditure being allowed as application of income of the trust and depreciation being allowable as a legitimate deduction in computing the real income of the assessee on general principles. In coming to this conclusion the High Court followed its earlier decision in CIT vs Munisuvarat Jain (1994) Tax Law Reporter 1084 (Bom). The Supreme Court in the judgment cited supra held that it is a fundamental and unwritten axiom that no Legislature could have intended a double deduction in regard to the same business outgoing and if it is so intended, it will be clearly expressed. On this basis the Supreme Court refused to allow a deduction of depreciation on assets used for scientific research, since the acquisition of the assets themselves were allowable as deduction, even though the expenditure represented capital expenditure. Both these judgments have been considered by the Punjab & Haryana High Court in a recent decision in CIT vs Market Committee, Pipli (2011) 330 ITR 16 (P & H). In this case the assessee was a trust registered under the Income Tax Act as a charitable trust. The Assessing Officer