TMI Blog2016 (11) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim made under Section 11(2) of the Act. In view of the aforesaid, we find that the Tribunal was right in allowing the claim of the assessee under Section 11(2) of the Act. Hence, the question is answered in the affirmative in favour of the assessee - ITA No. 300/2015 C/W ITA No. 7/2016 - - - Dated:- 2-11-2016 - Jayant Patel And Aravind Kumar, JJ. For the Petitioner : Sri E I Sanmathi, Advocate For the Respondent : Sri A Shankar, Advocate ORDER In both the appeals, the only question which arise for consideration vide order dated 12.02.2016 in ITA No.300/2015 is as under: 6. Whether, in the given facts and circumstances, the Hon ble Tribunal is correct in law in holding that the assessee is eligible to claim accumulation under section 11(2) without appreciating the fact that the requirement of declaring the intention of the assessee to accumulate/set apart certain amount of income which could not be applied in the same assessment year as provided under section 11(2) is mandatory and the same should be spelt out in clear terms in the statutory Form No.10 filed along with the return of income and the assessee is required to invest or deposit such accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the jurisdictional High Court, the decision favourable to the assessee should be considered. Hence based on the decision of the High Court of Delhi, he allowed the appeal and directed the Assessing Officer to verify the form and allow the claim. In the further appeal the Tribunal after considering the submissions observed at paragraph-6 which reads as under: 6. We have heard the rival contentions and perused the order. In so far as depreciation on fixed assets are concerned, the issue had come up before this Tribunal in assessee s own case in ITA No. 600 601/Bang/2012, where it was held as under; 7. Having heard both the parties and having considered the rival contentions, we find that the basic issue is whether the decision of the Hon ble Supreme Court in the case of M/s Escorts Ltd., is applicable to the facts of the case before us. We find that a similar issues have arisen before this Tribunal in the case of Karnataka Reddy Jansangha as well as in the case of Shri Adichunchanagiri Shikshana Trust and this Tribunal after considering various decisions on the issue including the decision of the Kerala High Court in the case of Lessie Medical Institutions relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 12A of the I T Act. The object of the assessee was charitable in nature. The income of the assessee was exempt u/s 11 of the I T Act. The assessee had claimed depreciation which was rejected by the Assessing Officer on the ground that capital expenditure incurred during the accounting year was allowed as a deduction from the income of the assessee. Further, the assessee had claimed depreciation on furniture and fixtures to the tune of ₹ 49,453/- at 10% of the written down value which was disallowed by the Assessing Officer on the ground that the said assets had been received by the assessee on transfer from National Institute of Bank Management. That institute was a charitable trust. Its income was also exempt u/s 11 of the I T Act. The Assessing Officer did not allow depreciation on fixtures and furniture on the ground that full deduction had been allowed in respect of capital cost of furniture and fixtures and if the depreciation was allowed, as claimed by the assessee, it would result in double deduction. The assessee carried the matter in appeal and the appellate authority decided the matter in favour of assessee. The decision of the appellate authority was confirmed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st. It is ordered accordingly. 10. In the result, the appeal filed by the assessee is allowed. To the aforesaid order, one of us i.e AM is the signatory. As the facts and circumstances in the case before us are exactly similar to the facts of the case before the Co-ordinate Benches of the Tribunal, respectfully following the said decisions the assessee s appeals are allowed and the orders u/s 263 of the DIT(Exemp.) are vacated. 7. As for the second issue, it is necessary to reproduce section 11(2) of the Act and Rule 17 which are on accumulation; Where(eighty five) percent of the Income referred to in clause(a) or clause(b) of sub- section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income provided the following conditions are complied with, namely a) such person specifies, by notice in writi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in its favour, in preference to the decisions going against it. 6. The Tribunal ultimately did not interfere with the order of the CIT (Appeals). Under the circumstances, the present appeal before this Court. 7. Whereas in ITA No.7/2016, the facts are that the assessee-Trust set apart the amount of ₹ 75,00,000/- under Section 11(2) of the Act by filing Form No.10 and mentioned the purpose as under: To improve/develop the buildings of the trust and conduct educational/charitable activities. 8. The Assessing Officer found that there is no specific activity mentioned and the language used is general and therefore he disallowed the claim. The matter was carried in appeal before CIT (Appeals) and he concurred with the view of the Assessing Officer and allowed the appeal in part on other aspect which is not touching to the question involved. The Income Tax Appellate Tribunal in further appeal has more or less recorded the same reasoning and it relied upon its earlier decision in case of DDIT(E) Vs. Gokula Education Foundation in ITA No.1091/Bang/2014 dated 30.12.2014 (which is subject matter of ITA No.300/2015 being simultaneously heard and considered) and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, it needs to be emphasized that the issue centre rounds for compliance of Section 11(2) (a) of the Act only which provides for specification of the purpose for which the income is being accumulated or set apart. Since there is no controversy for the period for which the amount is set apart, we find it appropriate not to make any further observations in this regard. The only question therefore may arise is as to whether the specification of the purpose in the present case could be said as sufficient compliance for claiming the benefit under Section 11(2) (a) of the Act or not . 14. As we have recorded earlier in ITA No.300/2015 initially there was a broad purpose as towards objects of the Trust . Thereafter, it is in the revised Form No.10, it has been specified under sub head (a) and (b) which speaks for the development of infrastructure for furtherance of education and towards meeting of operating and administrating expenses for providing education facilities . Whereas in ITA No.7/2016 the objects specified is to improve/develop the buildings of the trust and to conduct educational/charitable activities . Be it recorded that it is not the case of the Revenue that any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the exemption as is admissible under sub-section (2) of Section 11 of the I.T.Act, 1961. The aforesaid shows that as per the view taken by this Court as long as the objects of the trust are charitable in character and as long as the purpose or purposes mentioned in Form No.10 are for achieving the objects of the Trust, merely because the details are not furnished, the assesssee cannot be denied benefit of the exemption under Section 11(2) of the Act. 18. In our view, the aforesaid view taken by the Co-ordinate Bench of this Court is concurring with the view taken by the Delhi High Court in case of Daulat Ram Education Society (supra). In any case, the aforesaid view taken by this Court in case of Envisions (supra) is binding on us and hence we do not find that the decision of the Calcutta High Court in case of Trustees of Singhania Charitable Trust (supra), upon which reliance has been placed by the learned Counsel for the Revenue would be of any help to the Revenue. 19. The learned Counsel for the appellants- Revenue did contend that if the revised Form No.10 was found to be not acceptable, then in ITA No.300/2015 the purpose is too general and too vague. Hence, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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