TMI Blog2012 (9) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) and restore the matter to his file for deciding the aforesaid issues, afresh in accordance with law - in favour of revenue. - ITA No.2905/Del/2012 - - - Dated:- 28-8-2012 - R K Gupta, A N Pahuja, JJ. For Appellant: Shri K K Khanna, AR For Respondent: Shri Pithi Lal, DR ORDER Per: A N Pahuja, AM: This appeal filed on 11.06.2012 by the Revenue against an order dated 18th April, 2012 of the ld. CIT(A)-XXI, New Delhi, raises the following grounds:- 1. "On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in allowing depreciation as application of income as the assessee trust has already claimed as application of income at the time of addition to fixed assets. 2. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing." 2. Facts, in brief, as per the relevant orders are that return declaring income of Rs.1,92,16,940/- filed on 29-09-2009 by the assessee, providing consultancy of automotive components, was selected for scrutiny with the service of notice u/s 143(2) of the Income-tax Act, 1961 (herein after referred to as the Act ]) issued on 16.09.2010.Duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act introduced by the Finance Act, 2009 w.e.f 01.04.2009. The assessee itself determined income in the computation of income under the head Profits and Gains of the Business or Profession and not in terms of provisions of sec. 11 12 of the Act. In the light of these undisputed facts, the issue before us is as to whether or not the assessee is entitled to depreciation u/s 32 of the Act, when the entire cost had already been claimed in the preceding years by way of application of income. Before proceeding further, we may have a look at the decisions relied upon by the assessee before the ld. CIT(A).First such decision is CIT V Rao Bahadur Calavala Cunnan Chetty Charities (1982) 135 ITR 485 (Mad) , wherein it was held in the AYs 1965-66 1966-67 that the income from the properties held under trust would have to be arrived it in the normal commercial manner without reference to the provisions which are attracted by s. 14 of the Act. Following this decision, Hon ble Karnataka High Court in Society of the Sisters of St. Anne (supra) in the AY 1997-78 held that if depreciation is not allowed as a necessary deduction for computing the income of a charitable institution then the cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 1st April, 2009, the scope and ambit of the said proviso to section 2(15) of the Act has to be examined and considered. Earlier orders under section 10(23C)(iv) are not relevant and are inconsequential, as they have not examined the scope and ambit of the first proviso. The proviso applies only if an institution is engaged in advancement of any other object of general public utility and postulates that such an institute is not "charitable" if it is involved in carrying on any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business. The second part, "any activity of rendering any service in relation to any trade, commerce or business" obviously intends to expand the scope of the proviso to include services, which are rendered in relation to any trade, commerce or business. The proviso further stipulates that the activity must be for a cess or fee or any other consideration. The last part states that the proviso will apply even if the cess or fee or any other consideration is applied for a charitable activity/purpose. The proviso has to be given full effect to. Thus, even if cess, fee or considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e difference in the rationale of the two deductions..." It was further recorded that (headnote) : "There is a fundamental, though unwritten, axiom that no Legislature could have at all intended a double deduction in regard to the same business outgoing ; and, if it is intended, it will be clearly expressed. In other words, in the absence of clear statutory indication to the contrary, the statute should not be read so as to permit an assessee two deductions..." 6. In the light of view taken in the aforesaid decisions, a mere glance at the impugned order reveals that the ld. CIT(A) did not analyse the issues in proper perspective and merely followed decisions rendered prior to insertion of the aforesaid first proviso to sec. 2(15) of the Act, despite the undisputed fact that the assessee itself did not claim benefit of provisions of sec. 11 12 of the Act in the computation of income annexed with return, filed report of audit in form 3CD in terms of provisions of sec. 44AB of the Act and declared suo motu income under the head Profits and Gains of the Business or Profession . Apparently, the order passed by the ld. CIT(A) is crypt ic and grossly violative of one of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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