TMI Blog2022 (6) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation on assets, investments in which had been allowed as application of income in preceding years as per the provisions of Section 11 of the Act and the impugned assessment year being assessment year 2014-15, the issue we find is squarely covered by the decision of the Hon ble Apex Court in its favour. In view of the same, we hold that the assessee is entitled to deduction of depreciation and the A.O. is directed accordingly to allow the same for the purposes of computing its income. Ground of appeal raised by the assessee is accordingly allowed. - ITA No. 425/Rjt/2017 - - - Dated:- 1-6-2022 - Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Shri Vimal Desai, A.R. For the Respondent : Shri Nihar Ranjan Samal, Sr.D.R. ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:- The present appeal has been filed by the Assessee against the order passed by the Commissioner of Income Tax (Appeals)-2, Rajkot, (in short referred to as CIT(A)), dated 21-09-2017, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the Act ) pertaining to Assessment Year (A.Y) 2014-15. 2. The solitary iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The ground of appeal no 1 is rejected. No argument have been advanced in support of the ground of appeal no. 2. The addition is therefore sustained. Ground of appeal is rejected. 4. The ground raised by the assessee challenging the order of the ld. CIt(A) in this regard is as under: 1.0 The Learned Commissioner of Income Tax (Appeals)- 2, Rajkot has erred in law and facts in disallowing claim of depreciation of Rs. 32,70,994/-, which may kindly allowed and justice be done. 5. Before us, ld. Counsel for the assessee pointed out that the issue stands covered as settled in favour of the assessee by the decision of the Hon ble Apex Court in the case of CIT vs. Rajasthan and Gujarati Charitable Foundation Poona reported in [2018] 402 ITR 441 (SC) wherein in identical facts and circumstances, it was pointed out, the Hon ble Apex Court had allowed the claim of depreciation dismissing the Revenue s contention that it tantamounted to double deduction in view of the fact that the entire cost of the assets had been allowed as application while computing the income of the assessee as per the provisions of Section 11 of the Act. Copy of the order was placed before us. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts have accepted the decision of the ITAT thereby dismissing the appeals of the Income Tax Department. From the judgments of the High Courts, it can be discerned that the High Courts have primarily followed the judgment of the Bombay High Court in 'Commissioner of Income Tax v. Institute of Banking Personnel Selection (IBPS)' [(2003) 131 Taxman 386 (Bombay)]. In the said judgment, the contention of the Department predicated on double benefit was turned down in the following manner: 3. As stated above, the first question which requires consideration by this Court is: whether depreciation was allowable on the assets, the cost of which has been fully allowed as application of income under section 11 in the past years? In the case of CIT v. Munisuvrat Jain 1994 Tax Law Reporter, 1084 the facts were as follows. The assessee was a Charitable Trust. It was registered as a Public Charitable Trust. It was also registered with the Commissioner of Income Tax, Pune. The assessee derived income from the temple property which was a Trust property. During the course of assessment proceedings for assessment years 1977-78, 1978-79 and 1979-80, the assessee claimed depreciation on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bombay High Curt, we answer question No. 1 in the affirmative i.e., in favour of the assessee and against the Department. 4. Question No. 2 herein is identical to the question which was raised before the Bombay High Court in the case of Director of Income-tax (Exemption) v. Framjee Cawasjee Institute [1993] 109 CTR 463. In that case, the facts were as follows: The assessee was the Trust. It derived its income from depreciable assets. The assessee took into account depreciation on those assets in computing the income of the Trust. The ITO held that depreciation could not be taken into account because, full capital expenditure had been allowed in the year of acquisition of the assets. The assessee went in appeal before the Assistant Appellate Commissioner. The Appeal was rejected. The Tribunal, however, took the view that when the ITO stated that full expenditure had been allowed in the year of acquisition of the assets, what he really meant was that the amount spent on acquiring those assets had been treated as 'application of income' of the Trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing income from those ..... X X X X Extracts X X X X X X X X Extracts X X X X
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