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Issues involved: Two separate appeals by Revenue against orders of Ld. CIT(A)-1, Mumbai for A.Yrs. 2007-08 & 2008-09, involving common issues of depreciation on fixed assets and set off of deficit of earlier year against income of current year.
A.Y. 2007-08: - Depreciation on fixed assets: The issue raised is covered by the decision of the Hon'ble Jurisdictional High Court in CIT Vs Institute of Banking Personnel Selection 264 ITR 110. The High Court held that depreciation is allowable on assets, even if cost fully allowed as application of income u/s. 11 in past years, following commercial principles. Grounds 1 & 2 dismissed in favor of assessee. - Set off of deficit: Covered by the same High Court decision, allowing adjustment of expenses incurred in earlier years against income of subsequent year as application of income for charitable purposes u/s. 11(1)(a). Ld. CIT(A) findings confirmed, and Revenue's Ground No. 3 dismissed. Appeal for A.Y. 2007-08 is dismissed. A.Y. 2008-09: - Claim of deduction u/s. 24: Covered by Tribunal Mumbai Bench decision in the case of Sri Sathya Sai Trust, allowing deduction of 30% of rental income under section 24 for a charitable trust. Ld. CIT(A) directed AO to allow the claim, and Revenue's Ground No. 1 dismissed. - Depreciation on fixed assets: Similar to A.Y. 2007-08, the issue is dismissed following the decision in the previous year's appeal. Revenue's appeal for A.Y. 2008-09 is dismissed. In both appeals, the common issues of depreciation and deduction were decided in favor of the assessee based on relevant High Court and Tribunal decisions, leading to the dismissal of Revenue's appeals for both assessment years.
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