ACIT (EXEMPTION), GHAZIABAD vs. M/S. CITY EDUCATIONAL TRUST, NOIDA

The only ground taken in this appeal is against the deletion of Rs.98,30,447/- on account of disallowance of depreciation.

Briefly stated, the facts of the case are that the assessee debited Rs.98.30 lac in its Income & Expenditure Account under the head ‘Depreciation.’ The Assessing Officer did not allow such claim on the ground that investment in fixed assets was claimed as ‘application of income’ in the year of purchase of asset and hence claiming depreciation on the same amounts to double disallowance. The ld. CIT(A) overturned the assessment order on this issue, against which the Revenue has come up in appeal before the Tribunal.

We have heard the ld. DR and perused the relevant material on record. There is no appearance from the side of the assessee despite notice. We are, therefore, proceeding to dispose of the appeal ex parte qua the assessee. It is observed that the only dispute in this appeal is against non-allowing of depreciation on the ground that the assessee- trust claimed application of income and hence the allowing of depreciation would amount to double deduction. We find that this issue is no more res integra in view of the fact that section 11(6) has been inserted by the Finance (No.2) Act, 2014 w.e.f. 01.04.2015 providing that : `where any income is required to be applied or accumulated or set apart for application, then, for such purposes the income shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under this section in the same or any other previous year.’ Since this provision for not allowing depreciation in respect of assets which was claimed as application of income at the time of the acquisition/purchase of assets has been inserted w.e.f.

In the result, the appeal of the Revenue is dismissed.