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TMI Blog2016 (11) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... e is required to invest or deposit such accumulated income in the forms or modes specified in section 11(5)?" 2. It may be recorded that when ITA No.300/2015 came to be considered for admission on 12.02.2016, the appeal was admitted only on the aforesaid question. However, so far as ITA No.7/2016 is concerned, the said appeal is so far not admitted. Hence, even if it is to be considered, the said appeal would require to be considered only on the above referred question. Hence, both the appeals are heard simultaneously. 3. We may also record that in ITA No.7/2016 so far as question No.1 is concerned, the learned Counsel for the respondents-Revenue has fairly declared that the said question is covered against the Revenue as per the decision dated 22.02.2016 of this Court in ITA No.1/2013 and allied matters. However, he stated that the matter is carried before the Apex Court. 4. Under the above circumstances, we find that even otherwise also, as question No.1 is already covered by the above referred decision of this Court dated 22.02.2016 in ITA No.1/2013 and allied matters, such question would no more arise for consideration in the present appeal. So far as question Nos.2 and 3 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Institutions relied upon by the learned DR) has held that the claim of depreciation of an asset, the entire cost of which has been allowed by way of application of income u/s 11(1) of the IT Act, 1961 is allowable. The relevant portion of the Tribunal's order is reproduced hereunder; "9. We have heard the rival submissions and carefully perused the materials on record. The income of the trust is required to be computed under section 11 on commercial principles, without reference to the heads of the income specified under section 14 of the Act. In other words, it is to be computed as per the book income and not total income as defined in section 2(45) of the Act. This proposition is laid down by various judgments of Hon'ble High Courts, namely, (i) CIT v Trustee of H.E.H. Nizam's Supplemental Religious Endowment Trust 127 ITR 378 (AP); (ii) CIT v Rao Bahadur Calavala Cunnan Chetty Charities 135 ITR 485 (Mad.) & (iii) CIT v Estate of V.L.Ethiraj 136 ITR 12 (Mad.). This position is also confirmed by the CBDT vide its Circular No.5-P (LXX-6) dated 19th June 1968. The income of the trust is to be computed on the commercial basis i.e. as per normal accounting. The normal accounting p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed by the Tribunal. 9.3 On reference, the Bombay High Court held "that the Tribunal was right in law in directing the Assessing Officer to allow depreciation on the assets, the cost of which had been fully allowed as application of income under section 11 in the past years". 9.4 The Hon'ble jurisdictional High Court in the case of CIT v Society of the Sisters of St.Anne 146 ITR 26 had categorically held that the amount of depreciation debited to the accounts of a charitable institution is to be deducted to arrive at the available income for the purpose of application to charitable and religious purposes. The decision of the Hon'ble jurisdictional High Court has been followed by the Hon'ble Madhya Pradesh High Court in the case of CIT v Raipur Pallottine Society 180 ITR 579 and by the Hon'ble Madras High Court in the case of Gonvindu Naicker Estate v Assistant Director of Income Tax and Another 248 ITR 368. Further, in the case of CIT v Sheth Manilal Ranchhoddas Vishram Bhavan Trust 198 IITR 598, it was held by the Hon'ble Gujarat High Court that depreciation should be allowed while computing the income under section 11(i)(a) of the Act. 9.5 The judgment of the Hon'ble Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O in the prescribed manner, the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed ten years. b) The money so accumulated or set apart is invested or deposited in the forms or modes specified in sub-section(5)". Provided that in computing the period of ten years referred to in clause (a), the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded; Provided further that in respect of any income accumulated or set apart on or after the 1st day of April, 2001, the provisions of this sub-section shall have effect as if for the words ten years at both the places where they occur, the words 'five years' had been substituted". Rule 17... The notice to be given to the AO or the prescribed authority under sub-section (2) of section 11 or under the said provision as applicable under clause(2) or clause(23) of section 10 shall b in Form No.10 and shall be delivered before the expiry of the time allowed under sub-section (1) of section 139, for furnishing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be said as covered by its earlier decision, wherein the reliance was placed upon the decision of Delhi High Court in case of Director of Income-Tax (Exemption) Vs. Daulat Ram Education Society reported at (2005) 278 ITR 260 (Delhi) and therefore ultimately allowed the appeal of the assessee by the impugned order. Under the circumstances, the present appeal before this Court. 9. We have heard Mr.E.I.Sanmathi, learned Counsel appearing for the appellants-revenue in both the appeals and Mr.A.Shankar, learned Counsel appearing for the respondent-assessee in both the appeals. 10. The learned Counsel for the appellants- Revenue mainly contended that unless there is a specific purpose mentioned in Form No.10, the language 'for general purpose' would not permit the assessee to claim the benefit under Section 11(2) of the Income Tax Act. He further submitted that in ITA No.300/2015 'too vague' and 'too general purpose' was mentioned, but the CIT (Appeals) during the course of hearing accepted the revised Form No.10 which was not permissible. 11. He submitted that if the revised Form No.10 is taken out, then the purpose mentioned for setting apart for claiming benefit under Section 11(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the object of the Trust. But the only case of the Revenue is that the purpose should be specifically mentioned, though it may be one of the objects of the Trust and it may be more than one of the objects of the Trust. 15. It is true that in case of Daulat Ram Education Society (supra), Delhi High Court observed that so long as one or more purposes are specified by the assessee find place in the objects for which the Society has been incorporated and so long as the said purpose/s are charitable in character, the benefit admissible under section 11 must flow to the assessee. If the matter is considered as it is, in view of the decision of the High Court of Delhi in case of Daulat Ram Education Society (supra), we do find that the question since is already covered by the decision of High Court of Delhi, it may not arise for consideration. 16. However, the learned Counsel appearing for the revenue by relying upon the decision of Calcutta High Court in case of Director of Income Tax (Exemption) Vs. Trustees of Singhania Charitable Trust reported at (1993) 199 ITR 0819 contended that as per the view taken by Calcutta High Court unless a specific purpose is mentioned, the benefit unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. In furtherance to his submission, he relied upon the decision of the Apex Court in case of Commissioner of Income Tax Vs. Nagpur Hotel Owners' Association reported at (2001) 247 ITR 0201 and contended that in the said decision, the Apex Court found that if Form No.10 was not filed by the assessee, the benefit could not be claimed nor could be granted under Section 11(2) of the Act. 20. Whereas, learned counsel appearing for the assessee contended that the appeal is a continuous proceeding and hence, if the Commissioner (Appeals) has permitted the assessee to file Revised Form No.10, such could not be said as prohibited by law. He also submitted that the aforesaid decision of the Apex Court in the case of Nagpur Hotel Owners' Association (supra) came to be considered by a Division Bench of the High Court of Gujarat in the case of Commissioner of Income Tax -versus- Mayur Foundation reported at (2005) 274 ITR 562 and the High Court of Gujarat, after considering the aforesaid decision of the Apex Court, found that additional ground can be entertained when the appeal is pending even before the Tribunal. Hence, he submitted that it is not a case where no Form No.10 whatsoever was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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