2019 (11) TMI 1713 - HC - Income Tax

Depreciation Claim u/s 32 of assessee trust - double deduction on account of depreciation - HELD THAT - The reliance on the decision of the Escorts 1992 (10) TMI 1 - SUPREME COURT in the question, does not support the contention of the Revenue. This for the reason that it did not deal with the issue of an exemption available to the Trust under Section 11 of the Act. It was concerned with the issue of double deduction being claimed under Section 35 of the Act i.e. capital expenditure on scientific research and depreciation under Section 32 of the Act. The issue of Section 11 of the Act has been directly dealt by the Apex Court in Rajasthan Gujarati Charitable Foundation, Pune 2017 (12) TMI 1067 - SUPREME COURT Thus, it would apply to the present facts.In view of the above, the question as framed does not give rise to any substantial question of law. Thus, not entertained. Carry forward of the deficit - This issue also stands concluded against the Revenue by the decision of the Apex Court in CIT (Exemption) v/s. Subros Educational Society 2018 (4) TMI 1622 - SC ORDER

Summary

Issues:
1. Disallowance of depreciation under Section 32 of the Income Tax Act
2. Claim for carry forward of deficit

Analysis:

Issue 1 - Disallowance of depreciation under Section 32 of the Income Tax Act:
The Appeals challenge an order of the Income Tax Appellate Tribunal (the Tribunal) dated 8th June, 2016, for the Assessment Years 2010-11 and 2011-12. The common question raised by the Revenue in both Appeals is whether the Tribunal erred in allowing the appeal of the assessee on account of disallowing depreciation under Section 32 of the Act. The Tribunal's order dismissing the Revenue's appeal was based on the decision of the Court in CIT v/s. Institute of Banking Personal. The Revenue relied on the decision of the Supreme Court in CIT v/s. Rajasthan & Gujarati Cheritable Foundation, Pune, which upheld the view of the earlier decision. The argument based on the decision in Escorts Ltd. v/s. UOI was deemed irrelevant as it did not address the specific issue of exemption under Section 11 of the Act, unlike the decision in Rajasthan & Gujarati Charitable Foundation, Pune. Consequently, the question did not present a substantial question of law and was not entertained, leading to the dismissal of the Appeal.

Issue 2 - Claim for carry forward of deficit:
The second issue raised by the Revenue concerned the claim of the Assessee for carry forward of the deficit. This issue was also resolved against the Revenue by the decision of the Apex Court in CIT (Exemption) v/s. Subros Educational Society. As this question did not give rise to any substantial question of law, it was not entertained, resulting in the dismissal of the Appeal.

In conclusion, both Appeals were dismissed based on the above analysis of the issues raised by the Revenue, as the legal precedents and interpretations did not support their contentions.