TMI Blog2013 (2) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... by Honourable Supreme Court, in the case of Escorts India Limited Vs Union of India (199 ITR 43). 4. The ratio of the judicial decisions relied upon by the [ClT(A)] is not applicable to the facts and circumstances of the instant case. 5. The adverse appellate decision in the case of M/s. Coimbatore Stock Exchange Limited, relied upon by the [CIT(A)] has not been accepted by the Department, and Tax Case Appeal has been filed. 6. For these and other grounds, that may be adduced at the time of hearing, the order of the CIT(A) may be cancelled and that of the Assessing Officer restored. 2. The sole issue in the present appeal of the Revenue is that the CIT(A) erred in allowing the claim of depreciation to the assessee by holding it to be as application of income on stated charitable objects. 3. The brief facts of the case are that the assessee-trust is running various educational institutions. The assessee filed return of income for assessment year 2009-10 and claimed depreciation of ₹ 1,43,50,288/- out of the gross receipts received by the Trust of ₹ 8,62,75,057/-. The Assessing Officer disallowed the claim of depreciation by observing that for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the assessee is an AOP Trusts and registered u/s 12AA of the Act. While computing income u/s 11 of the Act, the assessee claimed depreciation of ₹ 1,43,50,288/- as deduction. The claim of depreciation was disallowed by the Assessing Officer on the ground that as the cost of the assets was itself allowed as application of income, therefore, allowing depreciation on the very same assets would amount to double deduction. 7. We find that similar issue had come up before this Tribunal in the case of M/s Great Lakes Institute of Management in I.T.A.Nos.931 932/Mds/2012, for assessment years 2006-07 and 2007-08, order dated 22.6.2012, wherein the Tribunal has held as under: 4. The only issue involved in both the years under consideration is that the CIT(A) erred in holding that capital expenditure is to be treated as application of income of the Trust as per section 11 and any further allowance by way of depreciation or otherwise would amount to extra deduction or double deduction which is not permitted in the Income-tax Act. 5. The brief facts of the case are that the Assessing Officer excluded the assessee s claim of depreciation while computing the application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee as canvassed by the Revenue. The judgment of the Hon'ble Supreme Court in Escorts Ltd. case [1993]199 ITR 43 is distinguishable for the above reasons. It cannot be held that double benefit is given in allowing claim for depreciation for computing income for purposes of section 11. The questions proposed have, thus, to be answered against the Revenue and in favour of the assessee. 10. Further, the Chennai D Bench of the Tribunal in the case of Coimbatore Stock Exchange(supra) has held as under: 5. We are unable to accept the submission. 6. The matter was discussed in our recent judgement dated 5.7.2010 in ITA No.535 of 2009, the CIT,Karnal v. Market Committee,Pipli. After referring to judgments in CIT V. Seth Manilal Ranchhoddas Vishram Bhawan Trust [1992] 198 ITR 598 (Guj.) and CIT v. Institute of Banking Personal Selection (IBPS) (2003) 131 Taxman 386 (Bom.), CIT v. Rao Bahadur Calavala Cunnan Chetty Charities [1982] 135 ITR 485 (Mad.), CIT v. Society of the Sisters of St. Anne [1984] 146 ITR 28 (Kar) and CIT V. Raipur Pallottine Society [1989] 180 ITR 579 (M.P.), the judgment of the Hon ble Supreme Court in Escorts Ltd., (supra), was held not to be applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while considering similar issue, the Hon'ble Delhi High Court in the case of Director of Income Tax vs Vishwa Jagriti Mission, 2012-TIOL-271-HC-DEL-IT has held as under: 11. The revenue is in appeal against the aforesaid order of the Tribunal. We are not inclined to admit the appeal and frame any substantial question of law since none arises from the order of the Tribunal. There is no dispute that the assessee has been granted registration under Section 12AA vide order dated 11th September, 2009 and, therefore, it was entitled to exemption of its income under Section 11. The only question is whether the income of the assessee should be computed on commercial principles and in doing so whether depreciation on fixed assets utilised for the charitable purposes should be allowed. On this issue, there seems to be a consensus of judicial thinking as is seen from the authorities relied upon by the CIT(Appeals) as well as the Tribunal. In CIT vs. The Society of the Sisters of St. Anme (Supra), an identical question arose before the Karnataka High Court. There the society was running a school in Bangalore and was allowed exemption under Section 11. The question arose as to how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation of assets owned by the trust/institution is a necessary deduction on commercial principles. The Gujarat High Court, after referring to the judgments of the Karnataka, Maharashtra and Madhya Pradesh High Courts cited above, also came to the same conclusion and held that the amount of depreciation debited to the accounts of the charitable institution has to be deducted to arrive at the income available for application to charitable and religious purposes. 13. The judgment of the Supreme Court in Escorts Limited Vs. Union of India (supra) has been rightly held to be inapplicable to the present case. There are two reasons as to why the judgment cannot be applied to the present case. Firstly, the Supreme Court was not concerned with the case of a charitable trust/institution involving the question as to whether its income should be computed on commercial principles in order to determine the amount of income available for application to charitable purposes. It was a case where the assessee was carrying on business and the statutory computation provisions of Chapter IV-D of the Act were applicable. In the present case, we are not concerned with the applicability of these provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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