TMI Blog2014 (1) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... Coch/2013 - - - Dated:- 10-1-2014 - Shri N. R. S. Ganesan, JM And B. R. Baskaran, AM,JJ. For the Petitioner : Smt. Latha V. Kumar, Jr. DR For the Respondent : Shri M. Anil Kumar, CIT(DR) Assessee by Shri L. Kuriakose, Advocate ORDER Per B.R.BASKARAN, Accountant Member: The appeals filed by the Revenue and the Cross Objections filed by the respective assessees are directed against the orders passed by Ld CIT(A)-V, Kochi, in the respective hands of the assessees and they relate to the assessment year 2009-10. 2. Since the main issue urged in these appeals is identical in nature, they were heard together and are being disposed of by this common order. 3. The revenue is aggrieved by the decision of the Ld. CIT(A) in directing the Assessing officer to allow depreciation on assets which were not claimed as application of income u/s. 11(2) of the Act. In the appeal filed in the case of Trichur Educational Trust, the revenue has raised one more ground relating to the quantum of application of income eligible for deduction u/s. 11 of the Act. In the cross objections, both the assessees are supporting the decision rendered by Ld CIT(A). 4. The facts relating to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of depreciation. The Ld. CIT(A) was convinced with the explanations of the assessees and accordingly, directed the Assessing officer to allow depreciation on assets which are not claimed as application of income u/s. 11(2) of the Act. The observations made by the Ld. CIT(A) in the case of Trichur Educational Trust are extracted below for the sake of convenience: "12, On a reading of the assessment order, I find that the Assessing officer has not at all considered the revised computation of total income and revised statement of depreciation and completed the assessment as such. Similarly, through the jurisdictional High Court has confirmed the order of the Tribunal, as observed in para 8 at page 10 of the judgment, which has been reproduced in the preceding paragraphs of this order, the Assessing officer has not dealt with that observation too. According to the appellant, those materials were very much available before the Assessing officer. In this case also, the assessee has consistently following the same method of accounting. There is no change, for the year under appeal. It has revised its total income and written back the depreciation for this year and even for the previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has, during the year under consideration, has claimed deduction only on those assets, the cost of which were not claimed as deduction as application of income. Accordingly he submitted that the AO was not justified in rejecting that depreciation claim also. 8. We have heard the rival contentions and carefully perused the record. The decision rendered by the Hon'ble Kerala High Court in the case of M/s Lissie Medical Institutions was considered by this bench of Tribunal, vide its order dated 07-12-2012, in the case of Shanti Sadan Society in ITA No. 74/Coch/2012. For the sake of convenience, we extract below the relevant observations made by the bench in the above cited case. "6. However, during the course of hearing, both the parties agreed that the impugned issue is covered against the assessee by the later decision dated 26.10.2010 rendered by the Hon'ble Jurisdictional Kerala High Court in the case of Lissie medical Institutions in ITA No.42 of 2011. In the above said case, the assessing officer had disallowed the claim of depreciation by holding that the assessee is not entitled to claim depreciation on those assets whose cost of acquisition was claimed as application of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s vested with the High Court. Accordingly, we are of the view that the Tribunal is not entitled to give any such relief as given by the High Court, since the Tribunal has to act within the authority of the provisions of the Act. Accordingly, we decline to give any such direction as given by the Hon'ble High Court." We have already noticed that the Ld CIT(A), while giving direction, has referred to the provisions of sec. 11(2), which prescribes the procedures to be followed for accumulation of income, when the amount applied in the current year falls short of 85% of the current year's income. We have already noticed that the Hon'ble High Court has allowed M/s Lissie Medical Institution to accumulate u/s 11(2) of the Act, the amount of depreciation relating to earlier years, which became disallowable in view of the order of the Hon'ble High Court. Since the Ld CIT(A) has mentioned sec. 11(2) in the instant case after quoting the relevant observations of Hon'ble High Court, it is possible to interpret that the Ld CIT(A) has also given directions similar to that given by the Hon'ble High Court in the case of Lissie Medical Institutions. 9. However, in the case of Shanti Sadan Socie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs furnished along with the return of income. The amount so claimed consisted of payments made towards Scholarship and Charity - Rs.27,80,774/- and other payments made towards acquisition of fixed assets. However, the AO noticed that the assessee had availed loans to the tune of Rs.1,80,00,000/- for incurring capital expenditure. Accordingly the AO allowed deduction of Rs.27,80,774/- relating to "Scholarship and Charity" and did not allow the claim for deduction of cost of fixed assets. It is pertinent to note that the assessee had claimed a sum of Rs.1,50,20,996/- (including Scholarship and Charity of Rs.27,80,774/-) as application of income in the revised computation. The AO did not consider the revised workings furnished by the assessee. The Ld CIT(A), however, directed the assessing officer to allow the claim of the assessee as per revised computation. 13. According to Ld D.R, the assessee had availed a loan of Rs.1,80,00,000/- for acquiring fixed assets and has utilized the same for acquiring the assets. However, the assessee has claimed cost of those assets as application of income. According to Ld D.R, the assessee has only used the loan amount and not its income for acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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