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2021 (4) TMI 1176 - HC - Income TaxAssessment of trust - disallowing depreciation claimed on the premise that the cost of the assets were already claimed as application of income - HELD THAT:- Issue decided against revenue as relying on M/S. SRA SYSTEMS LTD. [2021 (3) TMI 977 - MADRAS HIGH COURT]. Set off to excess application of income of previous Assessment Years - HELD THAT:- When the assessee-Trust applies 85% of its income received by way of voluntary contributions other than the voluntary contributions received with specific directions and the income derived from property held under Trust, then, such income shall not be included in the total income of the Trust. Further, the balance 15% of such income even if accumulated or set apart shall also not be included in the total income of the Trust. The Tribunal, while dismissing the appeal, observed that when the Trust applies its fund from its corpus, accumulated fund, sundry creditors or from the loan obtained by the trust, then, such funds which are applied cannot be said to be funds applied from the income of the Trust. Further, the Tribunal held that there cannot be a case where the Trust can apply its income more than the income received by it for the purpose of section 11(1)(a) and (b) of the Act. In the Judgment reported in MATRISEVA TRUST [1999 (3) TMI 34 - MADRAS HIGH COURT] the Hon'ble Division Bench of this court, while deciding the substantial questions of law as to the set off of the deficiency of funds of this year against the earlier year surplus is concerned, categorically decided the same in favour of the assessee and against the Revenue. Though the appellant-assessee relied upon the said Judgment before the Income Tax Appellate Tribunal, the Tribunal did not consider the same. The Commissioner of Income Tax (Appeals), went beyond its jurisdiction and commented on the Judgments of the High Courts. Commissioner of Income Tax (Appeals) is bound by the Judgments/Orders of the High Courts. The Commissioner of Income Tax (Appeals) was not sitting over appeal on the Judgments of the Hon'ble High Courts. If the Judgments/Orders of the High Courts are applicable to the facts and circumstances of the case pending before the Commissioner of Income Tax (Appeals), he must follow the Judgments/Orders of the Hon'ble High Courts without any deviation. The observation made by the Commissioner of Income Tax (Appeals) is unwarranted and cannot be appreciated in any manner. Thus we set aside and the matter is remitted back to the Assessing Officer to decide the matter afresh taking into consideration the ratio laid down in the Judgment of the Hon'ble Division Bench of this court reported in Matriseva Trust after giving opportunity of hearing to the appellant-assessee.
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