TMI Blog2018 (6) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. - I.T.A. No. 2722/CHNY/2017 - - - Dated:- 18-6-2018 - Shri N. R. S. Ganesan, Judicial Member And Shri Abraham P. George, Accountant Member Appellant by : Shri. Sanath Kumar Raha, JCIT. Respondent by : Shri. G. Seetharaman, C.A. ORDER Per Abraham P. George, Accountant Member Department through this appeal, which is directed against an order dated 29.08.2017 of ld. Commissioner of Income Tax (Appeals)-17, Chennai, assails the direction given by him to allow the assessee its claim of depreciation on assets, cost of which were treated as application of income. 2. We have heard the ld. Counsel for both sides. 3. Assessing Officer had denied the claim of depreciation made by the assessee which is a trust regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication of income for C.A. No. 7186/ 2014 etc. charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit to the assessee. Though it appears that in most of these cases, the CIT (Appeals) had affirmed the view, but the ITAT reversed the same and the High Courts have accepted the decision of the ITAT thereby dismissing the appeals of the Income Tax Department. From the judgments of the High Courts, it can be discerned that the High Courts have primarily followed the judgment of the Bombay High Court in 'Commissioner of Income Tax v. Institute of Banking Personnel Selection (IBPS)' [(2003) 131 Taxman 386 (Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th chargeability of income from profits and gains of business and section 29 provides that income from profits and gains of business shall be computed in accordance with section 30 to section 43C. That, section 32(1) of the Act provides for depreciation in respect of building, plant and machinery owned by the assessee and used for business purposes. It further provides for deduction subject to section 34. In that matter also, a similar argument, as in the present case, was advanced on behalf of the revenue, namely, that depreciation can be allowed as deduction only under section 32 of the Income Tax Act and not under general principles. The Court rejected this argument. It was held that normal depreciation can be considered as a legitimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those assets in computing the income of the Trust. The ITO held that depreciation could not be taken into account because, full capital expenditure had C.A. No. 7186/ 2014 etc. been allowed in the year of acquisition of the assets. The assessee went in appeal before the Assistant Appellate Commissioner. The Appeal was rejected. The Tribunal, however, took the view that when the ITO stated that full expenditure had been allowed in the year of acquisition of the assets, what he really meant was that the amount spent on acquiring those assets had been treated as 'application of income' of the Trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing income from those assets in subse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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