2010 (12) TMI 1206 - AT - Income Tax

Summary

Issues involved: Allowability of depreciation on a capital asset already allowed as deduction.

Summary:
The appeal by the Revenue was directed against the order of the Commissioner of Income-tax(Appeals) for the assessment year 2005-06. The grounds of the Revenue in the appeal stated that the CIT(A)'s order was erroneous both in law and in facts, and failed to appreciate the decision of the Apex Court in the case of Escorts Ltd. regarding the applicability to trust cases. The issue was whether depreciation on a capital asset, already allowed as deduction, should be permitted.

The counsel for the assessee argued that the issue was in favor of the assessee based on a decision of the Hyderabad Bench of the Tribunal in a previous case. The Departmental Representative could not counter this argument but relied on the Assessing Officer's order. After considering the submissions, it was found that the issue of allowability of depreciation on the capital asset was covered in favor of the assessee by a decision of the coordinate Bench of the Hyderabad Tribunal in a specific case. The Tribunal noted that in the case of a charitable institution, a specific provision regarding depreciation was not available under the relevant section of the Act. Therefore, the decision was made in favor of the assessee, and the appeal of the Revenue was dismissed.

The order was pronounced in court on 3.12.2010.