2019 (6) TMI 606 - AT - Income Tax

Depreciation claim to assessee trust - double deduction - HELD THAT - The factual finding given by the CIT(A) that assessee has not claimed any double deduction could not be controverted by the Ld. DR. CIT(A) has given a direction to the AO to verify the facts and allow the depreciation, therefore, the Revenue should not have any grievance. In view of the finding given by the CIT(A) and in absence of any contrary material brought to our notice by the CIT(A) that assessee has claimed double deduction, we find no infirmity in the order of the CIT(A) directing the AO to delete the disallowance. Accordingly, the same is upheld and the ground raised by the Revenue is dismissed.

Summary

Issues:
- Disallowance of depreciation on capital expenditure claimed by the assessee.

Analysis:
1. Facts of the Case: The assessee, a society registered under various acts, filed its return of income for AY 2012-13 declaring nil income. The Assessing Officer (AO) disallowed depreciation of ?1,14,59,837 on the grounds that allowing depreciation on capital expenditure would result in double deduction.

2. Arguments Before CIT(A): The assessee contended that it had not claimed double deduction. The total depreciation claimed was ?1,17,52,513, including ?59,39,744 on a building treated as application of income earlier. The assessee consistently claimed depreciation on assets other than the building. Previous year's disallowance was allowed by the CIT(A) and Tribunal.

3. CIT(A) Decision: The CIT(A) observed that the assessee did not claim double deduction and had followed ethical principles by not claiming double deductions. The AO was directed to allow depreciation, appreciating the assessee's adherence to ethical practices.

4. Tribunal's Decision: The Tribunal upheld the CIT(A) decision, noting that the assessee had not claimed double deduction. The CIT(A) directed the AO to verify facts and allow depreciation. The Tribunal found no infirmity in the CIT(A) order and dismissed the revenue's appeal.

5. Conclusion: The Tribunal dismissed the revenue's appeal, upholding the CIT(A) decision to allow depreciation. The factual finding that no double deduction was claimed by the assessee remained uncontested. The Tribunal found no grounds to overturn the CIT(A) order, affirming the allowance of depreciation on the disputed capital expenditure.

This detailed analysis covers the issues involved in the legal judgment, outlining the arguments presented, decisions made by the CIT(A) and Tribunal, and the final outcome of the case.