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2015 (10) TMI 1451 - AT - Income TaxDepreciation on capital expenditure applied for the object of the trust - whether allowance of deduction on account of depreciation will amount to double deduction? - CIT(A) allowed the claim - Held that - No force in the contentions raised by the learned Departmental representative as the relief has been granted by the learned Commissioner of Income-tax (Appeals) on the basis of decision of jurisdictional High Court in the case of DIT v. Vishwa Jagriti Mission (2015 (8) TMI 89 - DELHI HIGH COURT ). When the decision of the jurisdictional High Court is available on any issue then as per well established law, the same is binding upon the authorities working under the jurisdiction of the High Court. The issue raised by the Revenue is squarely covered by the aforementioned decision of the hon ble jurisdictional High Court in the case of DIT v. Vishwa Jagriti Mission (supra) therefore, we do not find any error in the relief given by the learned Commissioner of Income-tax (Appeals) to the assessee in respect of both the impugned assessment years. Accordingly, we decline to interfere and the Departmental appeals being devoid of merits are dismissed. - Decided in favour of assessee.
Issues:
Appeals filed by Revenue against orders of Commissioner of Income-tax (Appeals) for assessment years 2008-09 and 2009-10 regarding grant of depreciation to a charitable trust. Detailed Analysis: Issue 1: Grant of Depreciation The Revenue contested the deletion of depreciation claimed by the charitable trust, arguing it would result in double deduction as capital expenditure was treated as applied for the trust's object. The Commissioner of Income-tax (Appeals) decided in favor of the trust, citing the decision of the Delhi High Court in DIT v. Vishwa Jagriti Mission. The High Court held that depreciation on assets used for charitable purposes should be allowed as a necessary deduction on commercial principles for computing income available for charitable purposes. The High Court distinguished this case from Escorts Ltd. v. Union of India, stating that depreciation for charitable institutions is a legitimate deduction. The Department argued that granting depreciation would lead to double deduction, referring to a clarification by the Central Board of Direct Taxes in a Kerala High Court case. However, the Tribunal found no merit in the Department's contentions, upholding the relief granted by the Commissioner of Income-tax (Appeals) based on the binding decision of the jurisdictional High Court. Therefore, the Tribunal dismissed the Revenue's appeals, as the issue was settled by the High Court's decision in the Vishwa Jagriti Mission case. In conclusion, the Tribunal upheld the decision of the Commissioner of Income-tax (Appeals) to allow depreciation to the charitable trust, as per the precedent set by the Delhi High Court, and dismissed the Revenue's appeals for both assessment years 2008-09 and 2009-10.
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