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TMI Blog2022 (5) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant assessee before Income Tax Appellate Tribunal [for short "Tribunal"] as; 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 Rs2,91,37,194/- 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.4,91,59,159/- 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." (Emphasis Supplied) 4. Succinctly stated the facts of the case are; 5.1 The assessee is a Society registered under the Madhya Pradesh Government Registration Act, 1973 and has registered as Charitable Trust / institution u/s 12AA of the Act, and whereas it has engaged in charitable activities like support and promotion for the advancement of educational activities etc, and has for AY 2013-2014 filed its r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 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. ( J.K. Synthetics Ltd.) Vs. Union of India 199 ITR 43 (SC)[1993]" 5.2 To fortify the action of disallowance of depreciation, the Ld. AO articulated the applicability of newly inserted provision of subsection 6 to section 11 of the Act by the Finance Act, 2014 with a strong conviction that, through the provision of section 11(6) is effective from AY 2015-2016, it is indeed enacted as clarificatory in nature to restrain opening of concluded assessments, and holding applicable for the year under consideration has fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 being not emanating out of impugned assessment order, hence 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 Society 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 & Gujarati Charitable Foundation" reported in 402 ITR 441 (SC). Adverting to the aforestated judicial precedent, it is submitted that, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 Karnataka High Court in "CIT Vs Society of the Sisters of St. Anne" (146 ITR 28); Hon'ble Madhya Pradesh High Court in "CIT Vs Raipur Pallottine Soci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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