TMI Blog2018 (5) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... f income for subsequent years and therefore we direct the Assessing Officer to allow the claim of the assessee for set off of excess expenditure of earlier years against current year’s income following case of CIT v. Institute of Banking Personnel Selection [2003 (7) TMI 52 - BOMBAY High Court ] Not allowing the quantum of depreciation as claimed - Held that:- On a perusal of the Assessment Order, we find that, there is neither discussion nor any finding recorded by the Assessing Officer regarding denial of depreciation to the assessee. Further we also find that assessee has raised ground before the Ld.CIT(A) on this issue but the Ld.CIT(A) by simply following the order of his predecessor for the Assessment Year 2011-12 dismissed the appeal for A.Y. 2012-13 with a direction to follow the order for the Assessment Year 2011-12. As stated by the Ld.CIT(A) that in so far as the issue of carry forward of set off of deficit is concerned he is in agreement with the view taken by the Assessing Officer. Ld.CIT(A) further recorded that no submissions were made with reference to other issues raised in grounds of appeal. Therefore, there was no discussion either in the Assessment Order or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 7190/Mum/2016 are dismissed as infructuous. 4. Coming to the appeal for the Assessment Year 2012-13, Learned Counsel for the assessee submitted that the Ground No s. 1 to 6 and 8 relates to denial of Exemption u/s. 11 by the Assessing Officer and sustained by the Ld.CIT(A) and the issue is identical to that of the issue decided by the Tribunal for the immediately preceding Assessment Years i.e. A.Y.2010-11 2011-12 and all the contentions raised by the Assessing Officer in denying the exemption u/s. 11 during the current Assessment Year have already been dealt with by the Coordinate Bench in the order and allowed the appeals of the assessee holding that the assessee is entitled for exemption u/s. 11/12 of the Act. Therefore, Ld. Counsel for the assessee submitted that the same may be followed for the Assessment Year 2012-13 also. 5. Ld. DR fairly submitted that the issue has been decided in favour of the assessee for the Assessment Years 2010-11 and 2011-12 by the Coordinate Bench. However, he strongly supported the orders of the Ld. CIT(A)/A.O. 6. We have heard the rival submissions, perused the orders of the authorities below and the decision of the Coordinate Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board of India established under section 3 of that Act; and (C) in which at least fifty-one per cent of equity shares are held by the investor and the balance equity shares are held by members of such investor;] Admittedly, the facts reveal that the assessee has made investment in its wholly owned subsidiary company in accordance with the directions of SEBI. The main object of subsidiary was to acquire the membership rights of the BSE / NSE so as to facilitate the members of the investor. The assessee is a recognized stock exchange by Central Government in terms of Section 4 of the Securities Contract Regulation Act. Therefore, on these facts we find that the investment in subsidiary was in tune with the requirement of Section 11(5) read with Rule 17C and there was no violation of the same and therefore, the assessee could not be visited with consequential disallowance u/s 13(1)(d)(iii). 5.2. Proceedings further, we find that the shareholders of the assessee consist only of public sector undertaking / government undertaking as evident from Page Nos. 65 of the paper book and the directors of assessee company were largely nominee directors as per Annual Return of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Their revival. the Group considered the suggestions/revival plans submitted by the small stock exchanges and recommended that small stock exchanges may be permitted to promote a subsidiary which can acquire membership rights of larger stock exchanges viz. NSE/BSE/CSE/OSE or any other exchange subject to usual conditions applicable to the other' members. In this connection, it has been decided that small stock exchanges may promote/float a subsidiary/company to acquire membership rights of other stock exchange subject to the under noted conditions: 1. The subsidiary/company shall be 100% owned by the stock exchange promoting/floating such a subsidiary/company. The name of the subsidiary company shall not contain the words 'Stock Exchange . 2. The members of the Stock Exchange shall register themselves as sub-brokers of the subsidiary/company to enable them trade through the subsidiary/company 3. The subsidiary/company shall not undertake any dealing in securities on its Own account. 4. The subsidiary/company shall register only the members of the stock exchange, which is promoting the subsidiary/Company as its sub-broker and no other client/su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the principles of res judicata do not apply to Income Tax Proceedings yet there being no change in facts or circumstances, the revenue is debarred from shifting stands without any cogent reasons in view of rule of consistency. This is well supported by the observation of Hon ble Apex Court rendered in Radhasoami Satsang vs. CIT [193 ITR 321] which reads as under: - Strictly speaking, res judicata does not apply to income-tax proceedings. Though, each assessment year being a unit, what was decided in one year might not apply in the following year; where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. Thus, it can be stated that although the principle of res judicata is not generally applicable to Income Tax Proceedings since an assessment for a particular year is final and conclusive between the parties only in relation to the assessment for that year and it is not binding either on the assessee or the Department in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the case, the issue being identical in all respect except for figures and minor variations, our observations / conclusions mutatis mutandis apply to the same which results into assessee s appeal being allowed by us. 7. Since facts are identical this year following the said order, we hold that the assessee is entitled for the exemption u/s. 11 of the Act. This ground of appeal is allowed. 8. Ground No. 7 of the grounds of appeal is regarding confirming the action of the Assessing Officer in not allowing the setoff of earlier years loss against current year s income. 9. Learned Counsel for the assessee submitted that this issue is squarely covered by the decision of the Hon'ble Bombay High Court in the case of CIT v. Institute of Banking Personnel Selection [264 ITR 110]. Referring to the said decision, it is submitted that the Hon'ble High Court held that excess expenditure incurred in the earlier years can be adjusted against income of subsequent years and such adjustment would be application of income for subsequent years. Therefore, it is submitted that the excess of expenditure incurred by the assessee in earlier years should be allowed to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee for set off of excess expenditure of earlier years against current year s income following the above decision of the Hon'ble Jurisdictional High Court (supra). 14. The last issue in the appeal of the assessee i.e. ground No. 9 is in respect of not allowing the quantum of depreciation as claimed by the assessee. 15. Learned Counsel for the assessee submitted that this issue is also decided by the Hon'ble Bombay High Court in the case of CIT v. Institute of Banking Personnel Selection (supra) wherein it has been held that depreciation is allowable on the assets, the cost of which has been fully allowed as application of income under section 11 in past years. Further referring to the decision of the Hon'ble Supreme Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation Poona in Civil Appeal No. 7186 of 2014 dated 13.07.2017, Ld. Counsel for the assessee submitted that the decision of the Hon'ble Bombay High Court was affirmed on this issue. 16. Ld. DR vehemently supported the orders of the authorities below. 17. We have heard the rival submissions, perused the orders of the authorities below. on a perusal of the Assessment Or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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