2014 (12) TMI 1167 - AT - Income Tax

Depreciation claim - entire cost of the assets have been claimed by the assessee and allowed as application of its income for charitable purposes - Held that - We find the issue of the assessee s claim for depreciation on addition to assets acquired in the relevant period is to be allowed even if the entire cost of the same assets have been claimed by the assessee and allowed as application of its income for charitable purposes since this issue has been held in favour of the assessee in a number of decisions of the co-ordinate bench of this Tribunal in the cases of Dr. T.M.A. Pai Foundation (2010 (2) TMI 1156 - ITAT BANGALORE ) Academy of General Education (2015 (9) TMI 272 - ITAT BANGALORE ) following the decision of the Hon ble Bombay High court in the case of CIT V Institute of Banking reported in (2003 (7) TMI 52 - BOMBAY High Court ). Following the decisions of the Hon ble Bombay High Court in the case of Institute of Banking (supra) and of the co-ordinate benches (cited supra in this para) we uphold the order of the learned CIT (Appeals) in allowing the assessee s claim for depreciation on new assets acquired and put into use during the relevant previous year under consideration even if the entire cost of those assets have been claimed by the assessee and allowed as application of its income for charitable purposes. - Decided in favour of assessee.

Summary

Issues:
1. Allowance of depreciation on capital assets acquired during the year.
2. Claim for carry forward of unabsorbed deficit for previous assessment years.

Analysis:

Issue 1: Allowance of Depreciation on Capital Assets
The appeal by Revenue challenged the order of the CIT(Appeals) allowing the assessee's claim for depreciation on assets acquired during the relevant period. The Revenue contended that this resulted in double deduction, citing legal precedents. The Departmental Representative argued that the CIT(Appeals) erred in not following the decision of the Kerala High Court. However, the Authorised Representative supported the CIT(Appeals) decision, citing Tribunal decisions and legal precedents favoring the assessee. The Tribunal, after considering the arguments and legal precedents, upheld the CIT(Appeals) decision, allowing the depreciation claim on new assets acquired during the relevant year, even if the entire cost was claimed as application of income for charitable purposes. The Tribunal dismissed the Revenue's appeal on this issue.

Issue 2: Carry Forward of Unabsorbed Deficit
The assessee had claimed carry forward of unabsorbed deficit from previous assessment years to subsequent years. The CIT(Appeals) allowed this claim in favor of the assessee. The Revenue appealed against this decision, but the Tribunal did not address this issue in the judgment provided. Therefore, the decision of the CIT(Appeals) allowing the carry forward of unabsorbed deficit remains upheld based on the information available in the judgment.

In conclusion, the Tribunal dismissed the Revenue's appeal regarding the allowance of depreciation on capital assets acquired during the year. However, the judgment did not provide specific details on the decision regarding the carry forward of unabsorbed deficit.