2014 (3) TMI 1020 - AT - Income Tax

Claim of depreciation holding it as application of income on stated charitable objects - Held that - The issue in appeal is squarely covered in favour of the assessee by various decisions of the co-ordinate Bench of this Tribunal and in fact Commissioner of Income Tax (Appeals) followed those decisions of the Tribunal and allowed the claim of the assessee. On going through the above findings of the Commissioner of Income Tax (Appeals) we find that this issue has been decided in favour of the assessee following various decisions of the co-ordinate Bench of this Tribunal. Therefore we do not find any infirmity in the order passed by the Commissioner of Income Tax (Appeals) in allowing the claim of the assessee and uphold the same.

Summary

Issues:
Revenue's appeal against Commissioner of Income Tax (Appeals) order allowing depreciation as application of income on charitable objects for assessment year 2010-11.

Analysis:
The Revenue filed an appeal against the Commissioner of Income Tax (Appeals) order for the assessment year 2010-11. The only issue raised by the Revenue was the allowance of depreciation by the Commissioner of Income Tax (Appeals) as application of income on charitable objects. The Departmental Representative argued that the Assessing Officer had denied the claim of depreciation, stating it was outside the purview of section 11 of the Act and not applied towards the trust's objects. The Departmental Representative relied on a decision of the Hon'ble Kerala High Court to support the denial of depreciation. However, the Tribunal found that the issue was already decided in favor of the assessee by various decisions of the co-ordinate Bench. The Commissioner of Income Tax (Appeals) had allowed the claim of depreciation based on previous Tribunal decisions, directing the Assessing Officer to do the same.

The Commissioner of Income Tax (Appeals) had previously directed the Assessing Officer to allow depreciation in similar cases, citing precedents where the Tribunal upheld the depreciation claims of other trusts. The Tribunal noted that in cases of divergent judicial precedents, the one favoring the assessee should be adopted. The Tribunal referred to various cases where depreciation was allowed on fixed assets, following the decisions of the jurisdictional Tribunal. The Tribunal found no infirmity in the order passed by the Commissioner of Income Tax (Appeals) and upheld the allowance of depreciation as application of income on charitable objects. Consequently, the appeal of the Revenue was dismissed, and the order was pronounced in open court on a specified date in Chennai.