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TMI Blog2018 (11) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case and in law the ld. CIT(A) erred in allowing the appeal of the assessee on account of disallowing depreciation oil assets of Rs. 4,28,36,473/- in contravention of the decision of Escorts Ltd. vs. UOI 199 ITR 43 wherein it was held that since section 11 of the Income Tax Act provides for deduction capital expenditure incurred on assets acquired for the objects of the trust as application and does not specifically & expressly provide for double deduction on account of depreciation on the same very assets acquired from such capital expenditure, no deduction shall be allowed u/s32 for the same or any other previous year in respect of that asset as it amounts to claiming a double deduction. 2. Whether, on the facts and lit circumstances of the case and in law the ld. CITA) erred in allowing the appeal, when the Delhi High Court in the case of Charanjiv Chartiable Trust and Kerala High Court in the case of Lissie Medical Institutions vs. CIT 76 DTR (ker) 372 has decided the issue in the favour of the department after considering the decision of Hon'ble Supreme Court in the case of Escorts Ltd (199 ITR 43). 3. Whether, on the facts and in the circumstances of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, submissions of the appellant and findings given in the assessment order. The appellant has relied and furnished a copy of the appellate order in its own case for A.Y.2007-08 where my learned predecessor has considered this issue and decided in the following manner: 54 I have considered the AO's order as well as the appellant submission as depicted above. Having taken note of the AO's order as well as the submission of the appellant, I am of the considered view that the A.O. has misplaced the findings of the Supreme Court reported in 199 ITR 43. The said decision was on account of different context for making allowance u/s 32 and capital expenditure on scientific research under section 35W(iv) of the IT Act. Having perused the appellant submission, I find that even jurisdictional. High Court in the case of CIT vs Institute of Banking Personnel Selection 264 JTR 110 (Born.) has held that the depreciation should be allowed even on assets, the cost of which had been allowed as exempt u/s 11 in the preceding years. The Hon'ble High Court has also held that depreciation should be al/owed even on assets received on transfer from another charitable trust on which no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income of the trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from the gross income of the trust. Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment had been made having regard to the benevolent provisions contained in section 11 of the Act and such adjustment will have to be excluded from the income of the trust under section 11(1)(a). The Hon'ble Supreme Court, as argued by the assessee, has upheld the judgement of the Hon'ble Bombay High Court. The Hon'ble Apex Court has further held as under: It may also be mentioned at this stays that the legislature, realizing that there was no specify provision in this behalf of the Income Tax Act, has made amendment in section 11(6) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : - "'6.2 I have considered the facts and circumstances of the case, the assessment order of the AM, the submissions of the assessee and discussed the case with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided here in under: i. An identical issue had arisen in the appellant's own case for A.Y. 2008-09 wherein on identical facts my Id. Predecessor vide order dated 15.04.2014 has decided these grounds observing as under: 7.2 I have carefully considered the submissions of the appellant, assessment order and facts of the case. My ld. Predecessor has adjudicated the issue of excess application of income in Ground No. 1 of that appeal. He has decided the issue in following manner: 4.4 I have considered the A.O's order as well as the appellant submission as depicted above. Having taken note of the A.O's order as well as the submission of the appellant, I am of the considered view that the AO has misplaced the findings of the Supreme Court reported in 199 ITR 43. The said decision was on account of different context for making allowance u/s 32 of the IT Act and capital expenditure on scientific research u/s 35 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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