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TMI Blog2022 (5) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... th these appeals are identical in nature, they are heard separately on the date mentioned herein before, and disposed of by a common order, as such the adjudication in lead case ITA No 240/RPR/2017 laid in succeeding paragraphs, shall mutatis mutandis apply to ITA No 267/RPR/2017. 4. Before advancing the matter on facts for adjudication, it is necessary to reproduce grounds challenged by the appellant assessee before Income Tax Appellate Tribunal [for short "Tribunal"] as; In ITA No 240/RPR/2017 1. Ground 1: That on the facts and on the circumstances of the case the Ld. CIT(A) erred in sustaining disallowance of claim of depreciation of Rs,49,90,371/- made by Ld. AO. Disallowance is unjustified and uncalled for and may kindly be deleted." 2. Ground 2: That on the facts and on the circumstances of the case the Ld. CIT(A) erred in sustaining disallowance of claim to carry forward of excess application of fund of Rs.1,99,43,652/- made by Ld. AO. Disallowance is unjustified and uncalled for, carry forward of excess application of fund may kindly be allowed." 3. The assessee craves leave to add, urge, alter or withdraw any ground/s before or at the time of hearing of this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sie Medical Institution Vs CIT" reported at 348 ITR 344 (Kel) dislodged the claim for entitlement of depreciation holding it to be a double deduction, as the entire cost / value of assets on a previous occasion claimed & allowed as application of income in the hands of the assessee, and it is apt to reproduce the relevant part of the para 5 from the order of assessment for brevity; "It would be worthwhile to mention here that, in the case of Lessie Medical Institution Vs Commissioner of Income Tax reported in 348 ITR 344 Kerala (2012), the Hon'ble Court has decided the matter in favour of the revenue. In the case of Lessie Medical Institutions (Supra), which is a long judgement, passed by the divisional bench of Hon'ble Kerala High Court dealt the issue of double deduction in detail taking into consideration of almost all the judgements on this issue. In this case Hon'ble Kerala High Court have categorically decided that depreciation cannot be allowed when the full cost has been treated as application in any year. The Hon'ble High Court also observed that the other judgments were made per incuriam they did not consider the judgement of the apex court in the case of Escorts Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used material placed on records and duly considered the facts of the case in the lights of settled legal position and case laws relied upon both the parties to the appeal. 7. When the appeals is taken up in the course of virtual hearing, at the outset the Ld. AR adverting to the grounds of appeal filed, stated that, ground number 2 (of both the appeals) being consequential, is not pressed for adjudication, ergo the solitary ground of impugned disallowance stands for adjudication. 8. During the course of adjudication, the Ld. AR in support of claim for depreciation, made twofold submission, one; as to the income of the trust although liable to be computed in accordance with the provisions of section 11 to 13 of the Act, however before giving effect to the provisions of section 11 of the Act, income must first needs to be computed applying the commercial principle and in doing so, the claim of depreciation is must and secondly; the provision of newly inserted section 11(6) although is clarificatory in nature, but it is applicable from the AY 2015-2016, and to reinforcement the contention, the Ld. AR heavily relied on the decision of Hon'ble Apex Court in "CIT Vs Rajasthan & Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and against the Department." 10. Ad litem, The Ld. AO while carrying out the disallowance of depreciation found to have also relied on decision of Hon'ble Apex Court in "Escorts Ltd. Vs UOI" (supra), however it shall be mindful to make a mention that, the question before the Hon'ble Supreme Court in the matter of "Escorts Ltd Vs UOI" (supra) was related to duel claims of the assessee u/s 35 of the Act in relation to an item of same asset for weighted deduction and the secondly claim for depreciation. Thus, two benefits were claimed in respect of the very same asset, per contra the issue before us is entirely different and a distinct position in the present appeal is that, it involves a claim for exemption in respect of income earned from property held for charitable or religious purposes, consequently the views of Ld. AO to the given facts and circumstance being are contra legem, hence deserves reversal. Our view has been fortified by the plethora of judicial pronouncement of various High Courts, such as the Hon'ble Bombay High Court in the case of "CIT Vs Munisuvrat Jain (1994 Tax Law Reporter 1084) and "DIT (Exemption) Vs Framjee Cawasjee Institute" (109 CTR 463); Hon'ble K ..... X X X X Extracts X X X X X X X X Extracts X X X X
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