TMI Blog2010 (11) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... Since the issue involved is common, we reproduce the grounds of appeal for the Assessment Year 2001-02 in I.T.A. No. 1708/Del/2010: The Ld. CIT(A) has erred in law on facts by holdings that depreciation of ₹ 1,56,57,856/-, debited to Income Expenditure Account, is an allowable expenditure u/s 11 of the I. T. Act without appreciating the fact that depreciation is not a real expenditure and hence cannot be allowed as application of income. The order of the Ld. CIT(A) deserves to be set aside and the order of the A.O. be restored. 2. In the remaining years also the issue involved is common except difference in amount. 3. None appeared on behalf of the assessee in spite of notice and hence we proceed to decide these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2 lacs. 6. On merit also, we do not find any reason to interfere in the order of Ld. CIT(A). We find that Ld. CIT(A) has duly considered the judgment of Hon ble Apex Court rendered in the case of Escorts Ltd. (supra) and the finding is given by him that this decision has been rendered by Hon ble Apex Court on the issue of expenditure incurred on scientific research which is allowed u/s 35 of the I. T. Act and hence this judgment is not directly applicable to the issue involved in the present case whereas the judgment of Hon ble Apex Court rendered in the case of CIT Vs Programme for Community Organization reported in 248 ITR 01 is directly on the issue in dispute and in that case, it has been held by the Hon ble Apex Court that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 35(1) on account of expenditure incurred on scientific research and the assessee has also claimed deduction on account of depreciation on those very assets u/s 32. Under these facts, it was held by the Hon ble Apex court in that case that double allowance on the same asset cannot be allowed. In the present case, the facts are different. In the present case, firstly, the income of the trust has to be computed and for the purpose of computation of income of the trust, deduction has to be allowed of all the expenses including deprecation and thereafter, out of the income of the assessee, the assessee has to apply 75%/85% of the income of the assessee trust and only 25%/15% can be accumulated by the assessee trust. For the purpose of wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 599 (Guj.) f. CIT Vs Institute of Banking (2003) 264 ITR 110 (Bom.) g. Eight ITO Vs Trustees of Marathi Mission and Vice Versa 1 ITD 539 (Bom.) h. CIT Vs Programme for Community Organization 228 ITR 620 (Ker.) 9. In the course of arguments before us, it has been submitted by the Ld. D.R. that the Tribunal decision in the case of Mahila Sidh Nirman Yojna (supra) is on the basis of judgement of Karnataka High court rendered in the case of CIT Vs Society of Sister St. Anne (supra) and also after considering the judgement of M.P. High Court rendered in the case of CIT Vs Rajpur Palloine Society (supra). But even after that date, i.e. the date of the Tribunal decision i.e. 06.07.1994, there are various subsequent judgments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Pune. The assessee derived income from temple property, which was a trust property. During the course of assessment proceedings for the assessment years 1977-78m 1978-79 and 1979- 80, the assessee claimed depreciation on the value of the building at 2 per cent and they also claimed depreciation on furniture at 5 per cent. The question which arose before the court for determination was : whether depreciation could be denied to the assessee, as expenditure on acquisition of the assets had been treated as application of income in the year of acquisition? It was held by the Bombay High Court that section 11 of the income tax Act makes a provision in respect of computation of income of the trust from property held for charitable or religious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I. T. Act providing for depreciation for computation of income derived from business or profession is not applicable. However, the income of the trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the trust. In view of the aforestated judgement of the Bombay High Court, we answer question No.1 in the affirmative, i.e. in favour of the assessee and against the department. 10. Since the very dispute, which is to be decided by us is squarely covered by this judgement of Hon ble Bombay High Court, we are inclined to follow the judgement of Bombay High Court in preference to the tribunal decision cited by Ld. D.R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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