2017 (12) TMI 1255 - AT - Income Tax

Claim of depreciation to assessee trust - prospectivity or retrospectivity of amendment of sec 11(6) - Held that - An identical issue has been considered by the Hon ble jurisdiction High Court in case of CIT (E) vs. Mahima Shiksha Samiti (2017 (11) TMI 1421 - RAJASTHAN HIGH COURT) wherein the Hon ble High Court has held the amendment in section 11(6) of the Income Tax Act is prospective and not retrospective and therefore, the claim of depreciation is allowable prior to the amendment - Decided against revenue.

Summary

Issues:
1. Allowability of claim of depreciation under Section 11(6) of the Income Tax Act.
2. Interpretation of the amendment in Section 11(6) of the Income Tax Act as prospective or retrospective.
3. Application of High Court judgments on claim of depreciation and expenses.

Analysis:

Issue 1: Allowability of claim of depreciation under Section 11(6) of the Income Tax Act
The Revenue filed miscellaneous applications seeking the recalling of an order by the Tribunal concerning the allowance of depreciation claim. The Revenue argued that the claim of depreciation is not allowable due to the amendment in Section 11(6) of the Income Tax Act. However, the AR of the assessee contended that the issue is covered by decisions of the Hon’ble Rajasthan High Court, which held that the claim of depreciation is allowable prior to the amendment in Section 11(6).

Issue 2: Interpretation of the amendment in Section 11(6) of the Income Tax Act
The Tribunal considered the amendment in Section 11(6) and the applicability of the High Court judgments. It was noted that the High Court held the amendment as prospective, not retrospective, thereby allowing the claim of depreciation prior to the amendment. The Tribunal relied on similar views taken by the High Court in other cases to support the allowance of depreciation claimed by the assessee on capital assets.

Issue 3: Application of High Court judgments on claim of depreciation and expenses
The Tribunal referred to High Court judgments to support its decision on the claim of depreciation. The Tribunal emphasized that the judgments established that the amendment in Section 11(6) is prospective, leading to the allowance of depreciation. Additionally, the Tribunal considered expenses related to a foreign trip and concluded that they were rightly allowed as they were for the educational institution's benefit.

In conclusion, based on the High Court decisions and the interpretation of the amendment in Section 11(6) of the Income Tax Act as prospective, the Tribunal dismissed the Revenue's miscellaneous applications, affirming the allowance of depreciation and expenses.