TMI Blog2012 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... s that to arrive at net income, depreciation should be deducted. Therefore, allowance of depreciation by CIT(A) upheld - Decided against Revenue - ITA No. 1455/Del/2012 - - - Dated:- 27-7-2012 - SHRI J.S. REDDY AND CHANDRA MOHAN GARG, JJ. Appellant by: Surabhi Ahluwalia Respondent by: Shri Rajan Malik ORDER PER CHANDRA MOHAN GARG, J. This appeal has been preferred by the Revenue against the order of Commissioner of Income Tax(A)-XXI, New Delhi dated 24.1.2012. 2. The main ground in the appeal filed by the revenue reads as under:- On the facts and in the circumstances of the case, the ld. CIT(A) has erred in allowing the claim of double deduction i.e. capital expenditure as application of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessee society invoked the Commissioner of Income Tax(A) and by passing impugned order, the Commissioner of Income Tax(A) held that the claim of depreciation does not amount to double deduction and he allowed the appeal of the assessee society. Hence, this appeal by the Revenue before this Tribunal. 4. We have heard the rival arguments of both the parties and carefully considered the material placed before us on record. Ld. DR submitted that the assessee society was allowed capital expenditure and during the assessment it was also allowed the claim of depreciation on same capital expenditure and that tantamounts to double deduction, therefore, the action of the Assessing Officer u/s 154 of the Act was justified and on reasonable grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Karnataka, Maharashtra and Madhya Pradesh high Courts cited above, also came to the same conclusion and held that the amount of depreciation debited to the accounts of the charitable institution has to be deducted to arrive at the income available for application to charitable and religious purposes. 13. The judgment of the Supreme Court in Escorts Limited vs Union of India (supra) has been rightly held to be inapplicable to the present case. There are two reasons as to why the judgment cannot be applied to the present case. Firstly, the Supreme Court was not concerned with the case of a charitable trust/institution involving the question as to whether its income should be computed on commercial principles in order to determine the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhavan Trust (1992) 198 ITR 598 (Guj) wherein their Lordships held that the depreciation should be allowed u/s 11(1)(a) of the Act for the charitable institutions and societies as sub-section (1) of the Act provides that the income of the Trust is to be computed on commercial basis i.e. as per normal principles of accounting which provides that to arrive at net income, depreciation should be deducted. 7. We observe that in the original assessment order dated 12.11.2008, the Assessing Officer computed the total income of the assessee trust as nil but subsequently, the Assessing Officer disallowed the depreciation. 8. In view of above, we observe that the action of the Assessing Officer u/s 154 of the Act was based on wrong interpreta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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