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2015 (2) TMI 684 - ITAT MUMBAIExemption under section 11 denied - CIT(A) held that proviso to section 2(15) became applicable, because the transaction entered into by the assessee was outside the scope and object of the trust as it became profit motive - Held that:- CIT(A) while holding the transaction entered into by the assessee was outside the scope and object of the trust did not give any reason, that how in the current year, the objects were alienated. If at all some juggle was done with the objects, it was done in 1984 and not in the year under consideration. CIT(A) to gain some brownie points, the CIT(A) went beyond and in complete disregard to the provisions of section 251(2), by not allowing the assessee to even know about the enhancement being contemplated by him. This, in our opinion made the addition, consequence of enhancement, by way of denying the exemption under section 11, fallacious. Even if we accept the arguments of the DR that the CIT(A) was exercising his coterminous powers on the issue of allowance of exemption under section 11, even then the argument of the DR deserves to be rejected, because, the statute itself has given the safe guard under section 251(2), as mentioned earlier. In such a case, accepting or sustaining the order of the CIT(A) in denying the exemption under section 11, would amount to injustice to the assessee. - addition on account of section 41(1) is concerned, we set aside the order of CIT(A) and direct the AO to delete the addition made under section 41(1) - Decided in favour of assessee. Disallowance of depreciation - Held that:- Depreciation cannot be denied. Respectfully, therefore, following the decisions of Hon’ble Bombay High Court in the case of DIT (Ex) vs Framjee Cawasjee Institute [1992 (7) TMI 331 - BOMBAY HIGH COURT] wherein held that Depreciation on depreciable assets had to be taken into account in computing income of trust although the amount spent on acquiring such assets had been treated as application of income of trust in the year in which assets were acquired, we set aside the order of the CIT(A) and direct the AO to allow the rightful claim of depreciation. - Decided in favour of assessee.
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