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2014 (1) TMI 597 - AT - Income TaxDepreciation as application of income – Held that:- Following ACIT vs. Shri Adichunchanagiri Shikshana Trust [2013 (11) TMI 123 - ITAT BANGALORE] - The income of the assessee being exempt, the assessee is only claiming that depreciation should be reduced from the income for determining the percentage of funds which have to be applied for the purpose of Trust - There is no double deduction - The assessee is entitled to the deduction of depreciation – Decided in favour of assessee. Exemption u/s 10(34) – Held that:- Following assessee's own case for AY 2006-2007 - The ld. CIT(A) held that even if the income is exempt, the same has to be included in the gross receipts and has to be applied as per provisions of section 11(1) because income has to be computed in commercial manner - The ld. CIT(A) has not adjudicated the issue properly and has not passed a reasoned order – The issue was restored for fresh adjudication in the light of decision in case of General Insurance Corporation of India vs. DCIT. Adjustment of carry forward of excess application of income of earlier years – Held that:- Following assessee's own case for AY 2006-2007 - The exemption u/s 11 in the earlier years was not claimed by the assessee and the returns are barred by limitation, therefore, the question of excess application does not arise – The Tribunal held that the issue requires fresh examination with a direction "to examine the matter, on merit, for eligibility to tax exemption as a result of the registration u/s 12AA now available to the assessee and in the light of the requisite audit report and other documents now filed by the assessee" - The assessments for the earlier assessment years are still pending – The issue was restored for fresh adjudication. Interest u/s 234D – Held that:- Following assessee's own case for AY 2006-2007 - As per Explanation 2 which has been inserted in section 234D by the Finance Act, 2012 with retrospective effect from 1.6.2003 - The provisions of sec.234D shall also apply to the assessment year commencing before the first day of June, 2003 if the proceedings in respect of such assessment year is completed after the said date - The A.O. was justified in charging the interest u/s 234D of the Act – Decided against assessee.
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