2012 (8) TMI 1163 - AT - Income Tax

Summary

Issues involved: Appeals filed by Revenue and Cross Objections filed by assessee against order of Commissioner of Income Tax (Appeals) regarding allowance of depreciation.

Issue 1: Allowance of Depreciation
The Revenue contended that the Commissioner of Income Tax (Appeals) erred in allowing depreciation to the assessee trust based on certain court decisions. The assessee argued that the order granting registration under section 12AA of the Act justified the claim for depreciation. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to verify the claim of depreciation. The Revenue argued that the issue of deductibility of depreciation for charitable institutions was debatable, citing a Kerala High Court decision. The assessee relied on the decision of Punjab & Haryana High Court and Supreme Court to support the allowance of depreciation.

Judgment:
The Tribunal found no merit in the Revenue's appeals. It noted that if the issue of depreciation was debatable, then the Assessing Officer was also not justified in disallowing depreciation. The Tribunal referred to a decision of the Madras High Court in favor of the assessee regarding the allowability of depreciation for charitable institutions. Therefore, it upheld the order of the Commissioner of Income Tax (Appeals) and dismissed all appeals of the Revenue.

Cross Objections:
The assessee's Cross Objections were in support of the Commissioner of Income Tax (Appeals)'s order and did not raise any new grounds. As a result, the Cross Objections were dismissed as infructuous.

Conclusion:
All appeals of the Revenue and Cross Objections of the assessee were dismissed by the Tribunal in its order pronounced on August 22, 2012, at Chennai.