2021 (2) TMI 681 - HC - Income Tax

Assessment of trust - Depreciation on the asset purchased through application of income - HELD THAT - First substantial question of law involved in this appeal has already been answered against the revenue by a decision of the Supreme Court in 'CIT Vs. RAJASTHAN GUJARAT CHARITABLE FOUNDATION POONA' 2017 (12) TMI 1067 - SUPREME COURT as well as the decision of this Court in 'DIT Vs. AL-AMEEN CHARITABLE FUND TRUST' 2016 (3) TMI 462 - KARNATAKA HIGH COURT Eligibility to carry forward the deficit to the subsequent years, so that to set off with future year income - HELD THAT - second substantial question of law has already been answered against the revenue by the decisions of this Court in 'CIT Vs. OHIO UNIVERSITY CHRIST COLLEGE' 2018 (11) TMI 1055 - KARNATAKA HIGH COURT as well as 'PCIT Vs. MANIPAL ACADEMY OF HIGHER EDUCATION ( 2018 (8) TMI 1865 - KARNATAKA HIGH COURT .

Summary

Issues:
1. Eligibility for claiming depreciation on asset purchased through application of income.
2. Eligibility to carry forward deficit to subsequent years for set off with future year income.

Analysis:
1. The appeal under Section 260-A of the Income Tax Act, 1961, was filed by the revenue concerning the Assessment Year 2009-10. The substantial questions of law in this appeal revolved around the eligibility of the assessee for claiming depreciation on assets purchased through application of income. The learned counsel for the assessee referred to previous judgments, including one by the Supreme Court and another by the High Court, where similar issues were decided against the revenue. The counsel for the revenue did not dispute these references. Consequently, based on the precedents cited, the substantial question of law regarding depreciation eligibility was answered against the revenue.

2. The second substantial question of law in the appeal related to the eligibility of the assessee to carry forward the deficit to subsequent years for setting off with future year income. The counsel for the assessee pointed out judgments by the High Court that had already decided similar issues against the revenue. The counsel for the revenue did not contest these references. Therefore, following the reasoning and decisions in the previous judgments cited, the substantial question of law concerning the carry forward of deficit for set off with future year income was also answered against the revenue.

3. In conclusion, based on the judgments and reasoning provided in the previous decisions referred to during the hearing, the High Court answered both substantial questions of law against the revenue. Consequently, the appeal filed by the revenue was dismissed as it failed to establish merit in challenging the eligibility of the assessee for claiming depreciation on assets purchased through income application and for carrying forward deficits for set off in subsequent years.