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Income Tax Appellate Tribunal, MUMBAI BENCH “J”, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI SANJAY GARG
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the Revenue against the order dated 27.04.2015 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10.
The brief facts of the case are that the assessee is a charitable trust registered under section 12A of the Income-tax Act, 1961. During the previous year relevant to the assessment year under consideration, the assessee invested in fixed assets and claimed application of income and further claimed deprecation on the same fixed assets. The Assessing Officer held that the allowance of depreciation would amount to double deduction. The Ld. CIT(A) allowed the claim of the assessee. The Revenue, thus, has come in appeal before us.
2 M/s. Dawat-E-Hadiyah 3. The Revenue has taken as many as 7 grounds of appeal. But only two effective issues have been raised. The first issue is whether the assessee trust is entitled to the claim of depreciation on capital assets, expenditure in respect of which has already been claimed by the assessee as application of income. The second issue is as to whether on the facts and circumstances of the case and law, the assessee trust is entitled to claim the carry forward and set off of deficit of earlier years on account of excess expenditure/application of income.
The Ld. A.R., at the outset, has stated at bar that the issue is squarely covered in favour of the assessee by the earlier decision of the Tribunal in the own case of the assessee dated 30.07.15 for A.Y. 2010-11 and A.Y. 2011-12. Both the issues came under consideration before the Tribunal and the Tribunal while relying upon various decisions of the Hon’ble Bombay High Court including that of “CIT vs. Institute of Banking Personnel Selection” (2003) 264 ITR 110 (Bombay) and “DIT (E) vs. M/s. Najam Baug Trust” of 2013 vide order dated 14.01.15 has decided both the issues in favour of the assessee. The Tribunal has noted that the Hon’ble Bombay High Court in the case of “CIT vs. Institute of Banking Personnel Selection” (supra) has held that a trust can claim deprecation on assets, even if, cost of assets has been fully allowed as application of income under section 11 of the Act in past years and that there is no question of double deduction in allowing the depreciation in respect of assets acquired and used by the trust.
We find that in the case of “DIT(E) vs. Najam Baug Trust” (supra) the Hon’ble Bombay High Court has, while relying upon the decision in the case of “Institute of Banking Personnel Selection” (supra) has held that the assessee is entitled to claim carry forward losses/deficit on account of excess expenditure/application of income in earlier years. We further find that the Tribunal has also discussed in the own case of assessee, the effect of the amendment brought vide Finance (No.2) Act, 2014 in section 11(6) of the Act wherein it has been provided that depreciation will not be allowed while
3 M/s. Dawat-E-Hadiyah computing application of income w.e.f. April 1, 2015. The Tribunal while relying upon the decision of the Hon’ble Delhi High Court in the case of “Indra Prasstha Cancer Society” in ITA No.240 of 2014 order dated November 18, 2014 that the amended provisions are applicable w.e.f. the assessment year 2015-16 and the same will not have any applicability for the assessment years prior to A.Y. 2015-16. The Ld. D.R. has also fairly admitted that both the issues are squarely covered in favour of the assessee by various decisions of the Jurisdictional High Court as well as the decision of the Tribunal in the own case of the assessee.
In view of this, we do not find any infirmity in the order of the Ld. CIT(A) and the appeal of the Department is therefore dismissed.
Order pronounced in the open court on 22.07.2016.