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TMI Blog2014 (1) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in law and on facts in allowing depreciation on the assets, the cost of which has already been allowed as a deduction on account of application of income as this would amount to double deduction in view of the decision of the Hon'ble Supreme Court in the case of Escorts Ltd., 199 ITR 43 and the decision of Kerala High Court in the case of Lissie Medical Institutions vs. Commissioner of Income-tax, Kochi, 348 ITR 344. iii) Whether, on the facts and in the circumstances of the case, deduction of depreciation u/s.32 which falls under the head "Profit and Gains from business and profession" of the Income Tax Act, 1961, would be available to a charitable trust whose income is otherwise not assessable under the above head. iv) On the facts and circumstances of the case, the Ld.Commissioner of Income-Tax (Appeals) ought to have upheld the order of the Assessing Officer. v) It is, therefore, prayed that the order of the Ld.Commissioner of Income-Tax (Appeals) may be set aside and that of the Assessing Officer be restored. 2. The ld.DR of the Revenue supported the assessment order and reliance was placed on two judgements which are cited by the Revenue in Ground No.(ii). Ld.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011 in which similar issue has been allowed by following decision in ITA No.2221/Ahd/2008, A.Y. 2005-06, order dated 30.11.2010 observing as under: "9. We have considered the rival submissions and perused the material on record. In our considered view, there is no case for interference in the order of ld.CIT(A). 10. The issue of depreciation on the assets owned by the assessee trust and used in their activities is allowable in view of the two judgments referred to by the assessee in the written submissions. In addition to this, above view is supported by the decision of Hon'ble Madhya Pradesh high Court in CIT vs. Raipur Pallottine Society (1989) 180 ITR 579 (M.P.) wherein Hon'ble High Court held as under: "Depreciation is the exhaustion of the effective life of a fixed asset owing to "use" or obsolescence. It may be computed as that part of the cost of the asset which will not be recovered when the asset is finally put out of use. The object of providing for depreciation is to spread the expenditure incurred in acquiring the asset over its effective lifetime and the amount of provision made in respect of accounting period is intended to represent the proportion of such expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary, that the view of the assessee argued that the judgement of Hon'ble Supreme Court in the case of Escorts Ltd.(supra) is not applicable in the present case. The AR further argued that in the identical facts and circumstances of Hon'ble Punjab and Haryana High Court has distinguished the judgment of the Hon'ble Supreme Court in favour of the assessee. The Ld.AR has relied upon the following case laws:- i) CIT v. Sheth Manilal Ranchhoddas Vishram Bhavan Trust 198 ITR 590(Guj.) ii) CIT vs. Institute of Banking Personnel Selection 264 ITR 110 (Bom) iii) CIT vs. Society of the Sisters of Anne 146 ITR 28 (Ker.) iv) CIT vs. Raipur Pallottine Society 180 ITR 579 (MP) v) CIT vs. Market Committee, Pipli 330 ITR 16 (P&H) vi) CIT vs. Tiny Tots Education Society 330 ITR 21 (P&H) We have considered facts and circumstances of the case and submissions made by the respective Representatives of the parties. The Assessing Officer has disallowed the claim following the judgment passed by the Hon'ble Supreme Court in the case of Escorts Ltd. (supra). We find the Hon'ble High Court Punjab and Haryana has distinguished the judgment of the Hon'ble Supreme Court in the case of CIT vs. Tiny ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdictional High Court rendered in the case of CIT vs. Sheth Manilal Ranchhoddas Vishram Bhavan Trust 198 ITR 598 (Guj.) in addition to various other judgements of various other High Courts and all the judgements were brushed aside by the Hon'ble Kerala High Court on this basis that in these judgements, this aspect was not considered that allowing the depreciation will result into cash surplus going outside the books of accounts. In our considered opinion, when a binding judgment of Hon'ble Gujarat High Court is there, we have to follow the same in preference to any judgement of any other High Court unless there is a judgement of Hon'ble Apex Court which is contrary to the jdugement of Hon'ble Jurisdictional High Court. In the present case, only a judgment of Hon'ble Kerala High Court has been cited before us by the Revenue which is contrary to the judgement of Hon'ble Jurisdictional High Court but sitting in Gujarat, we are bound by the judgement of Hon'ble Gujarat High Court and, hence, we follow the same in preference to this judgment of Hon'ble Kerala High Court. Moreover, as per the judgement of Hon'ble Kerala High Court, it has been stated that allowing the depreciation wil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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