TMI Blog2016 (4) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... d letter for such a long period till the Assessing Officer making the assessment for the assessment year 2010-11 is not acceptable. There exists no reason for such delay. We are not in a position to accept the submission of the assesseee. Accordingly, we are inclined to reverse the order of the CIT(Appeals) and restore that of the AO. - Decided in favour of revenue Allowance of depreciation when the costs of acquisition of assets were treated as application of income for the purpose of claiming exemption u/s.11 - Held that:- In this case, the cost of the asset was allowed u/s 11 of the Act as application income since the assessee is a charitable institution entitled for exemption u/s 11. Therefore, the cost of the asset becomes NIL. When the cost of the asset becomes NIL, there is no question of allowing any depreciation. If the depreciation is allowed then it would amount to double deduction. Therefore, this Tribunal is of the considered pinion that provisions of section 11 of the Act will override section 32. In other words, if the assessee claims exemption u/s 11 under Chapter III of the Act, it cannot claim depreciation u/s 32 of the Act. Therefore, we are unable to uphold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessment year under consideration. Aggrieved, the assessee went in appeal before the CIT(Appeals). 4. On appeal, the CIT(Appeals) observed that there was utilization of amount pertaining to the AY 2000-01 in the year 2005-06 and utilization of amount pertaining to the AY 2001-02 in the AYs 2005-06, 2006-07. According to the CIT(Appeals), there was utilization of amount pertaining to the AY 1999-2000 in the assessment years 2005-06 and 2006-07 and there would not be any sum pertaining to AY 1999-2000 remained unutilized, if the sum pertaining to the AY 1999-2000 shall be taken in AYs 2005-06 and 2006-07. According to him, the mistake in calculation brought to notice of the AO, was not accepted. Accordingly, he observed that surplus pertains to AY 1999-2000 should be treated as utilized during AYs 2005-06 and 2006-07 and he deleted the addition. While allowing the claim of the assessee, he considered revised working for the purpose of accumulation of fund. Against this, the Revenue is in appeal before us. 5. We have heard both the parties and perused the material on record. We have gone through the details mentioned in the statement of accumulation and utilisation of fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;F' respectively and form part of this order. On verification of returns of income for earlier years and the annexure detailing statement of accumulation and utilization of funds (Annexure 'D') it is seen that the unutilized amount of A.Y. 1999-2000 was never spent at all. 6.3 When the Assessing Officer expressed her desire to tax the unspent balance of A.Y. 1999-2000 in A.Y. 2010-11 as per sec.11(3)(c) of the Act, the assessee filed a revised computation of income from AY 1999-00 to 2010-11, revising the entire application of income and accumulation of income. However, the Assessing Officer did not accept this. As stated earlier the unspent amount including the 25% of permissible accumulation is to be taxed in case of failure to spend within the stipulated time u/s.11(3)(c) of the Act. The same view has been reiterated in CBDT's Circular No.29 dated 23.08.1969. 6.4 The unutilized accumulated income for the AY 1999-2000 was not at all spent within the stipulated period till the AY 2010- 11, as required u/s.11(3)(c) of the Act. This fact was brought to the notice of the assessee during the assessment proceedings for the AY 2010-11. Subsequent to the above, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns of income filed by the assesseee for the A.Ys. 2005-06 2006-07 marked as 'E' 'F', (which is enclosed) that the assesseee carried forward the accumulation as unutilized funds for the AY 1999-00, which was not at all spent. However, before the CIT(Appeals), it was taken a plea that it was spent in AY 2005-06 and 2006-07 as per the revised computation filed before the AO. Further, it was taken a plea that it was an inadvertent mistake and submitted that in view of change of circumstances of the case, it was invested in land allotted by CMDA vide its letter dated 19.3.2009. When the department vide a letter dated 10.1.2013 raised a question on application of income, the letter dated 6.2.2013 from CMDA was filed by the assessee to prove that the assessee is intending to purchase the land. However, if the assesseee is bona fide, the assessee should have produced the order issued from the CMDA on 19.3.2009 and the reason for delay in filing the said letter for such a long period till the Assessing Officer making the assessment for the assessment year 2010-11 is not acceptable. There exists no reason for such delay. We are not in a position to accept the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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