TMI Blog2013 (11) TMI 1781X X X X Extracts X X X X X X X X Extracts X X X X ..... ctually 12 days delay in filing the appeal by the Revenue and the reason for the delay is that the miscellaneous records of the said case were misplaced and not able to trace out within time. It was thus, prayed for condoning the delay and admitting the appeal for hearing. 3. On the other hand, the ld. Counsel for the assessee has no objection to condone the delay of 12 days in filing the appeal. In view of the above, we condone the delay and admit the appeal for hearing. 4. Brief facts of the case are that the assessee is a society registered as Charitable Trust under section 12A of the Income Tax Act. The assessee, while computing exemption of income under section 11 of the Act, had considered depreciation on assets also as an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nathar Trust in I.T.A. No. 1954/Mds/2012 vide order dated 28.01.2013 and relevant para of this Tribunal order is reproduced hereunder: 6. We have perused the orders and heard rival contentions. No doubt, Hon ble Kerala High Court in the case of Lissie Medical Institutions v .CIT(supra), after considering the decision of Hon ble P H High Court in the case of M/s.Tiny Tots Education Society (supra), which had in turn followed its own decision in the case of Market Committee, Pipli (supra), has held that notional claim of depreciation on an asset, the value of which was claimed as an application of income could not be allowed while computing the income of a charitable institution. Their Lordships held so, for a reason that by making such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, specified in Section 14 of the Act, i.e. the book income and not total income as defined in Section 2(45) of the Act. This position is confirmed in CIT v. Trustees of H.E.H. Nizam s Supplemental Religious Endowment Trust (1981) 127 ITR 378 (A.P.), CIT v. Rao Bahadur Calawala Cunnan Chetty Charities (1982) 135 ITR 485 (Mad.) and CIT v. Estate of V.L. Ethiraj (1982)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 concept of commercial income necessarily envisages deduction of depreciation on assets of the Trust. Depreciation on assets of a Trust is to be deducted for the purpose of calculating income of a Trust. This is because of the fact that the concept of commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oddas Vishram Bhovan Trust (1992) 105 CTR (Guj) 303 it was held by Hon'ble Gujarat High Court that depreciation should be allowed while computing such income under Section 11(i)(a) of the Act. Assessing Officer s stand that provision of computation of income under Section 11 does not contain any provision which may entitle an assessee to claim weighted deduction for any expenses incurred is not acceptable as Section 11 provides that the income of the Trust is to be computed on commercial basis i.e. as per normal accounting principles. Normal Accounting Principles clearly provide for deducting depreciation to arrive at income. Income so arrived at (after deducting depreciation) is to be applied for charitable purpose. Capital exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avage of opinion on the issue where there was otherwise a unity among other High Courts on this issue. It is trite law when there is a cleavage of opinion on an issue between various High Courts, till such time the jurisdictional High Court has taken an adverse view, this Tribunal can elect to follow the view in favour of the assessee. We are of the opinion that Ld.CIT(A) was justified in directing the A.O. to consider the claim of depreciation as a part of utilization of the assessee. 11. The Revenue could not controvert the above findings of the Tribunal and the ld. DR has fairly accepted the decision of the Tribunal. In view of the above, we find no infirmity in the order passed by the ld. CIT(Appeals) and dismiss the grounds raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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