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TMI Blog2014 (1) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... lso shown income from other sources Rs. 66,67,07,780/- which was also set off against brought forward unabsorbed depreciation. However, the assessment was completed after making various disallowances at an income of Rs. 162,48,77,808/- vide order dtd. 26-12-2008 passed u/s 143(3) of the Income Tax Act, 1961 (the Act). 3. On the same basis, the assessment for the year 2007-08 was also completed at an income of Rs. 2,28,17,02,504/- as against the revised returned income of Rs. 'Nil', vide order dtd. 23-3-2009 passed u/s 143(3) of the Act. 4. On appeal, the ld. CIT(A) partly allowed both the appeals. 5. Being aggrieved by the order of the ld. CIT(A) the assessee is in appeal before us. ITA 1434/Mum/2010 (A.Y. 2006-07) 6. At the time of hearing, ground Nos. 1,2,5 & 6 are not pressed by the ld. Counsel for the assessee which was not objected to by the ld. D.R. 7. That being so and in the absence of any supporting material placed on record by the ld. Counsel for the assessee, the above grounds taken by the assessee are, therefore, rejected being not pressed. 8. Ground No. 3 is against the sustenance of addition u/s 14A of the Act. 9. Brief facts of the above issue are that it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied Rule 8D of the Income Tax Rules, 1962, which is applicable from the A.Y. 2008-09, we respectfully following the decision of the Hon'ble Jurisdictional High Court (supra) set aside the orders passed by the Revenue authorities on this account and direct the A.O. to make disallowance, if any, in the light of the above decision, after allowing reasonable opportunity of being heard to the assessee. The ground taken by the assessee is, therefore, partly allowed for statistical purpose. 12. Ground No. 4 is against the denial of exemption u/s 10(35) of the Act Rs. 10,41,02,402/-. 13. Brief facts of the above issue are that from the perusal of computation of income, the A.O. observed that an amount of Rs.10,41,02,402/- has been reduced from the gross receipt on the plea that this is tax free income and has to be excluded by computing the income u/s 11(1) of the Act. The A.O. further observed that exclusion of such income from gross receipts means that this income is not available for application as per provisions of section 11(1)(a) of the Act. He further observed that even if the income is exempted, this has to be included in the gross receipts and has to be applied as per provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end back the matter to his file to decide the same afresh in the light of our observation hereinabove and according to law including the decision of Hon'ble Bombay High Court in the case of General Insurance Corporation of India vs. DCIT (2012) 204 Taxman 587 (Bom) after providing reasonable opportunity of being heard to the assessee. The ground taken by the assessee is, therefore, partly allowed for statistical purpose. 18. Ground No. 7 is against the disallowance of depreciation on application of income Rs. 2,29,54,563/-. 19. Brief facts of the above issue are that it was observed by the A.O. that an amount of Rs. 49,05,97,130/- on account of purchase of fixed assets has been shown as application of income for the objects of the institution. In the computation of income, the assessee has also claimed depreciation as per Act including depreciation on the asset purchased in the year amounting to Rs. 49.05 crores. The assessee has also debited an amount of Rs. 1,20,37,104/- which are fixed assets of less than Rs. 1 lakh each into revenue account and has claimed depreciation. Thus the total addition on the fixed asset comes to Rs. 50,26,34,234/-. The assessee has treated the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n various decisions including the decision of Hon'ble jurisdictional High Court in Institute of Banking (supra) has held vide penultimate para 10 as under:- "In the present case, the assessee is not claiming double deduction on account of depreciation as has been suggested by learned counsel for the Revenue. The income of the assessee being exempt, the assessee is only claiming that depreciation should be reduced from the income for determining the percentage of funds which have to be applied for the purposes of the trust. There is no double deduction claimed by the assessee as canvassed by the Revenue. The judgment of the hon'ble Supreme Court in Escorts Ltd. case [1993] 199 ITR 43 is distinguishable for the above reasons. It cannot be held that double benefit is given in allowing claim for depreciation for computing income for purposes of section 11. The questions proposed have, thus, to be answered against the Revenue and in favour of the assessee". 15. In the absence of any distinguishing feature brought on record by the Revenue, we respectfully following the consistent view of the Hon'ble jurisdictiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to Rs. 760,91,01,001/- has been worked out. The A.O. after considering the assessee's submission in para 8 & 9 of the assessment order observed that the assessee has not claimed any exemption u/s 11 of the Act, the assessee is not entitled to set off of any excess application of earlier years amounting to Rs. 760,91,01,001/- as the assessee has not fulfilled conditions to claim exemption u/s 11 and the returns wherein the working of Rs. 760 crores is made are non-est and barred by limitation. He further observed that the application over and above 100% of income has been made from the borrowed funds, which does not constitute the income of that year and accordingly held that the income of Rs. 146,67,10,413/- is taxable as the assessee has not complied with provisions of section 11(2) of the Act. The A.O. before the ld. CIT(A) has also made the following submissions:- "It has been discussed in the assessment order in para 8 and 9 that, the judgments given by the appellant are not applicable in his case as the exemption u/s 11 was not claimed by assessee and returns barred by time limitation, therefore, question of excess application does not aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, he upheld the action of the A.O. 33. At the time of hearing the ld. Counsel for the assessee submits that on the facts and circumstances of the case, interest u/s 234D of the Act is not chargeable, therefore, the same be deleted. 34. On the other hand, the ld. D.R. supports the order of the A.O. and the ld. CIT(A). 35. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that the issue before us is no longer res integra. The Hon'ble Bombay High Court in CIT vs. M/s Indian Oil Corporation Ltd. (2012) 210 Taxman 466 (Bom) vide para 27 of the judgment has held as under:- "27) In view of the above, we hold that the decision of the Tribunal in ITO .V. Ekta Promoters Pvt. Ltd. reported in 113 ITD 719 which has been followed in the impugned order by the Tribunal is not correct. One more aspect of the matter which must be borne in mind is that till such time as the assessment proceedings are completed in respect of any assessment year, the amendment made to the Act would be applicable even in case of pending proceedings. It is not the case of the respondent that the proceeding in regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of addition u/s 14A of the Act, ground No. 5 is against the denial of exemption u/s 10(34) of the Act Rs. 10,42,71,151/-, ground No. 6 is against the denial of claim of adjustment of carry forward of excess application of income of the earlier years claimed in the computation of total income and ground No. 7 is against the levy of interest u/s 234D of the Act. 40. At the time of hearing both the parties have agreed that the facts of the above grounds are similar to the facts of the assessee's case for A.Y. 2006-07, therefore, the plea taken by them in the said appeal may be considered while deciding the above grounds. 41. After hearing the rival parties and perusing the material available on record, we find that there is no dispute that the facts of the above grounds are similar to the facts of the case for A.Y. 2006-07, therefore, we direct the A.O. to follow our findings recorded in paras 22 to 24 in respect of ground No. 3, para 11 in respect of ground No. 4, paras 16-17 in respect of ground No. 5, para 30 in respect of ground No. 6 and paras 35-37 in respect of ground No. 7 of this order. We hold and order accordingly. 42. In the result, the assessee's appeals stand part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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