2013 (5) TMI 1049 - AT - Income Tax

Summary

Issues involved: Appeal filed by revenue regarding depreciation allowance directed by CIT (Appeals) for a registered society u/s 12A running schools.

Summary:
The Appellate Tribunal ITAT Delhi heard appeals filed by the revenue challenging the direction of CIT (Appeals) to allow depreciation for a registered society u/s 12A of the Income-tax Act, 1961, operating schools. The society claimed depreciation on its assets, which was initially disallowed by the Assessing Officer but later granted by CIT (A). The issue was supported by various decisions of coordinate Benches of ITAT and the judgment of the Hon'ble Delhi High Court in a similar case. The High Court decisions emphasized that depreciation of assets owned by charitable institutions/trusts is a necessary deduction on commercial principles. The Tribunal, in line with the consensus of judicial opinion, dismissed the revenue's appeal as there was no contrary view presented, and no substantial question of law was framed. The appeals were therefore dismissed, and no costs were awarded.

In conclusion, the Tribunal upheld the CIT (Appeals) decision to allow depreciation for the registered society, emphasizing the necessity of considering depreciation as a deduction for charitable institutions/trusts on commercial principles.