TMI Blog2016 (6) TMI 1457X X X X Extracts X X X X X X X X Extracts X X X X ..... ble jurisdictional High Court, we find no infirmity in the conclusion drawn by the Ld. Commissioner of Income Tax (Appeal). We affirm the same. - Decided against revenue. - ITA NOs.6879 & 6880/Mum/2014 - - - Dated:- 8-6-2016 - Shri Joginder Singh, Judicial Member, and Shri Ashwani Taneja, Accountant Member Revenue by Shri B.S. Bist (DR) Assessee by Shri Hardik Thakkar O R D E R Per Bench The Revenue is aggrieved by the impugned orders dated 22/08/2014 of the Ld. First Appellate Authority, Mumbai. The common grounds raised in the impugned appeals is with respect to allowing the claim of depreciation of Rs.5,13,92,267/- (Assessment year 2010-11) Rs.5,01,50,153/- (Assessment year 2011-12), relying upon the decision from Hon ble jurisdictional High Court in the case of CIT vs Institute of Banking Personal Services (264 ITR 110)(Bom.), ignoring the ratio laid down by Hon ble Apex Court in Escorts Ltd. vs UOI (199 ITR 43)(SC), wherein, the Hon ble Supreme Court has held that the double deduction cannot be presumed, if the same is not specifically provided by the law in addition to normal deduction and further to allow carry forward of deficit of excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e current year. The assessee was asked to furnish the details and the same were furnished on 17/12/2012 and 31/01/2013. The ld. Assessing Officer framed assessed u/s 143(3) of the Act and made the disallowances with respect to claim for depreciation of the respective amount as application of income u/s 11(1)(a) of the Act on the plea that the same amounts to double deduction as the capital expenditure incurred on these assets has already been allowed as application of income. 2.3. On appeal, before the Ld. Commissioner of Income Tax (Appeal), the factual matrix was considered and following the decision from Hon ble jurisdictional High Court in the case of CIT vs Institute of Banking Personal (264 ITR 110) (Bom.), CIT vs Plot Swetamber Murti Pujak Mandal (211 ITR 293)(Gujarat) decided the issue in favour of the assessee. The Revenue is aggrieved and is in appeal before this Tribunal. 2.4. Before coming to any conclusion and the facts available on record, we find that the Hon ble jurisdictional High court in the case of Institute of Banking Personal (supra) held as under:- This reference is made at the instance of the Revenue under section 256(1) of the Income-tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been received by the assessee on transfer from_National Institute of Bank Management That institute was also a charitable trust Its income was also exempt under section 11 of the Income-tax Act The Assessing Officer did not allow depreciation on fixtures and furnitures on the ground that full deduction had been allowed in respect of capital cost of furniture and fixtures and if the depreciation is allowed, as claimed by the assessee, it would result in double deduction Further, during the assessment year in question the assessee had carried forward the deficit of the earlier years and had adjusted the deficit of the earlier years against the surplus of the subsequent years which was disallowed by the Assessing Officer on the ground that such carry forward was applicable only to income assessable under the head Profits and gains of business and such carry forward and adjustment was not permissible in case of income assessable under section 11 to section 13 of the Income-tax Act as the income of the charitable trust was not assessable under the head Profits and gains of business Therefore, the assessee carried the matter in appeal on all the three points which are int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on general principles or under section 11(1)(a) of the Income-tax Act The court rejected the argument on behalf of the Revenue that section 32 of the Income-tax Act was the only section granting benefit of deduction on account of depreciation It was held that income of a charitable trust derived from building, plant and machinery and furniture was liable to be computed in a normal commercial manner although the trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets In all such cases, section 32 of the Income-tax Act providing for depreciation for computation of income derived from business or profession is not applicable However, the income of the trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the trust In view of the aforestated judgment of the Bombay High Court, we answer question No 1 in the affirmative, ie, in favour of the assessee and against the Department Question No 2 herein is identical to the question which was raised before the Bombay High Court in the case of Director of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under section 28 in which the provision for carry forward of losses was relevant That, in the case of a charitable trust, there was no provision for carry forward of the excess of expenditure of earlier years to be adjusted against income of the subsequent years We do not find any merit in this argument of the Department Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment has been made having regard to the benevolent provisions contained in section 11 of the Act and that such adjustment will have to be excluded from the income of the trust under section 11(1)(a) of the Act Our view is also supported by the judgment of the Gujarat High Court in the case of CIT v Shri Plot Swetamber Murti Pujak Jain Mandai [1995] 211 ITR 293 Accordingly, we answer question No 3 in the affirmative, ie, in favo ..... 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