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TMI Blog2023 (7) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... llow necessary depreciation as per law. AO is erred in not allowing depreciation claimed by the assessee for the AY 2010-11 In a situation where the assessee is not claimed depreciation on fixed assets for any reason, but the AO while computing income of an assessee, should allow depreciation allowable as per law. Arguments of the AO that any fresh claim can be made only by filing a revised return, we find that although, the law restricts the AO to admit any fresh claim without any revised return, but there is no prohibition for the appellate authorities to admit fresh claim made by assessee to decide the issue and this principle is supported by the decision of Goetze (India) Ltd [ 2006 (3) TMI 75 - SUPREME COURT] . Therefore, we are not in agreement with the reasoning given by the AO to deny depreciation claimed for earlier assessment years. Claim of depreciation beyond six years for the first time - HELD THAT:- There is no provision under law to make assessment of an assessee beyond six years. Therefore, claim made by the assessee beyond six years cannot be admitted, because, there is no provision under the law to modify the income of the assessee by the AO. Therefore, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the proposition laid down by the Hon'ble Madras High court in the case of Seventh Day Adventists Vs DIT, Exemptions III, Chennai wherein the Hon'ble High court has categorically stated that Section 11(6) of the Income Tax Act, 1961 is applicable only prospectively. Therefore, purely on this ground the order of the CIT(A) is liable to be deleted. 5. The Appellant has complied with the provisions of the Income Tax Act, 1961 and there is no violation of Section 1 l(3)(c) of the Income Tax Act, 1961 as stated by the respondent. The appellant had in fact utilized the amount for the purpose for which it was accumulated earlier as per Section 11(2) of the Income Tax Act, 1961. Under these circumstances the order of CIT (A) is liable to be deleted. 6. There is no specific provision under the Income Tax Act, 1961 to disallow an amount applied by the trust towards the administrative cost which is relating to the promotion of education, being the main objects of the trust. Therefore, there is a fundamental error committed by the learned CIT (A) in stating that the appellant has not utilized the amount towards the objects of the trust. The appellant runs a school and wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment proceedings, the assessee has filed a revised statement of total income and claimed depreciation on fixed assets as an expenditure allowable while computing income from property held under Trust on the basis of certain judicial precedents, including the decision of the Hon ble Karnataka High Court in the case of CIT v. Society of the Sisters Anne reported in [1984] 146 ITR 28 (Kar.). For the AY 2011-12, the assessee had also claimed depreciation on fixed assets pertains to AYs 2001-02 to 2009-10 aggregating to Rs. 2,83,31,198/- by way of revised statement of total income. 4. The AO, however, was not convinced with the explanation of the assessee and also not satisfied with revised statement of total income filed by the assessee claiming depreciation on fixed assets. The AO has rejected the claim as admissible deduction while computing income from property held under Trust on the ground that once the assessee has claimed total amount spent for capital expenditure as application of income, then claiming depreciation on very same capital asset amounts to double deduction. Therefore, rejected revised computation filed by the assessee claiming depreciation. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment years, now it cannot be claimed depreciation of earlier years in one year, because said claim of the assessee may give distorted financial position of any assessee, including the assessee. Further, assuming for a moment, the assessee is entitled to claim depreciation and the AO is bound to allow said depreciation, but even if you go by the law, the assessee can at best claim depreciation of six years, but not beyond that period, because, when there is no provision under the law to assess income of any assessee beyond six years, the question of modifying income of earlier period does not arise. Therefore, there is no reason to give benefit to the assessee. 7. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The facts borne out from the records clearly indicate that the assessee has not claimed depreciation on fixed assets while computing income from property held under Trust right from AYs 2010-11 to 2013-14. For the first time, the assessee has made a claim for depreciation on fixed assets from the AY 2010-11 before the AO by filing a revised statement of total income and claimed that said cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has made a claim by filing revised statement of total income and claimed depreciation pertains to AYs 2001-02 to 2009-10 amounting to Rs. 2,83,31,198/- before the AO. The AO rejected the claim made by the assessee for earlier assessment years on the ground that there is no provision in this Act to re- open the assessment beyond six years and further, any fresh claim towards expenditure or allowance, can be made only by filing a revised return. Since, the assessee has made a claim without any revised return, the AO has rejected the claim of the assessee. We have gone through the reasons given by the AO to deny depreciation claimed towards earlier assessment years in light of various arguments advanced by the Ld.Counsel for the assessee and we find that as per Sec.32(1) of the Act, the AO is bound to allow depreciation allowance as per law, even though, the assessee has not made a claim towards depreciation on fixed assets in the return of income filed for relevant assessment year. Therefore, in a situation where the assessee is not claimed depreciation on fixed assets for any reason, but the AO while computing income of an assessee, should allow depreciation allowable as per law. F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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