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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI
Before: SHRI KARUNAKARA RAO, AM & SHRI SANJAY GARG, JM
सुनवाई की तायीख / Date of Hearing : 18.07.2016 घोषणा की तायीख /Date of Pronouncement : 18.07.2016 आदेश / O R D E R PER D. KARUNAKARA RAO, AM: There are five appeals under consideration and they are filed by the Revenue involving the assessment years 2008-09; 2009-10 and 2010-11. Since, the issues raised in all these appeals are identical, therefore, for the sake of convenience, though they are heard separately, considering the commonality of the issues involved, they are clubbed and disposed of in this consolidated order.
Since, the grounds raised
in all the five appeals are identical, therefore, for the sake of reference and for the purpose of adjudication, the grounds raised by the Revenue in appeal (AY 2010-2011) are extracted as under:- “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. 45,00,115/- in contravention of the decision of Escorts Ltd vs. UOI 199 ITR 43 wherein it was held that since section 11 of the Act provides for deduction capital expenditure incurred on assets acquired for the objects 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 shall be allowed u/s 32 for the same or any other previous year in respect of that asset as it amounts to claiming of double deduction.
2. Whether, on the facts and in the circumstances of the case and in law, CIT (A) erred in allowing the depreciation, when the Delhi High Court in the case of Charanjiv Charitable Trust and Kerala High Court in the case of Lissie Medical Institutions vs. CIT 76 DTR (Ker) 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. The common issue involved in all these appeals relates to allowability of claim of depreciation on fixed assets acquired for the objects of the Trust.
4. In connection with the above issue, Ld Counsels for the assessee mentioned that the issue is covered in favour of the assessee by various decisions of the Tribunal as well as the Hon’ble High Courts. Referring to the issue of allowability of depreciation on the assets acquired by the Trust, by virtue of application of its funds, Ld Counsel brought our attention to various binding judgments viz, the Hon’ble Bombay High Court in the case of CIT vs. Institute of Banking; Bombay Stock Exchange Ltd vs. Deputy Director of Income Tax (Exemption) & Ors; judgment of the Bombay High Court in the case of Director of Income Tax (Exemption) vs.
Framjee Cawasjee Institute [1999] 109 CTR (Bom) 463; judgment of Hon’ble Punjab and Haryana High Court in the case of CIT vs. Market Committee, Pipli [2011] 330 ITR 16 (P&H) and another judgment of Punjab and Haryana High Court in the case of CIT vs. Tiny Tots Education Society [2011] 330 ITR 21. In this regard he read out the conclusion given in the case of Director of Income Tax (Exemption) vs. Framjee Cawasjee Institute which reads as under:
Conclusion: Depreciation on depreciable assets had to be taken into account in computing income of trust although the amount spend on acquiring such assets had been treated as application of income of trust in the year in which assets were acquired; answer being self-evident, reference declined.
On the other hand, Ld DRs relied on the orders of the Revenue Authorities.
We have heard both the parties and perused the orders of the Revenue Authorities as well as the cited judgments of Hon’ble High Court of Bombay in the case of CIT vs. Institute of Banking, wherein it was held “that the Tribunal was right in law in direct the Assessing Officer to allow depreciation on the assets, the cost of which had been fully allowed as application of income under section 11 in the past years. Considering the binding nature of the judgments and the covered nature of the issue, we are of the opinion that the issue of allowability of depreciation on depreciable assets should be decided in favour of the assessee. Accordingly, the decision taken by the CIT (A)s by allowing the assessee’s claim in all the appeals under consideration is fair and reasonable and the same does not call for any interference. Thus, all the grounds raised
by the Revenue in all the appeals under consideration are dismissed.
7. In the result, 5 appeals filed by the Revenue are dismissed. Order pronounced in the open court on 18th July, 2016. Sd/- Sd/- ( SANJAY GARG) (D. KARUNAKARA RAO ) न्मायमक सदस्म / JUDICIAL MEMBER रेखा सदस्म / ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 18.07.2016 व.यन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2.