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TMI Blog2015 (8) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... red from such capital expenditure, no deduction shall be allowed u/s 32 for the same or any other previous year in respect of that assets as it amounts to claiming a double deduction." 2. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A), erred in allowing the depreciation, when the Delhi High Court in the case of Charanjiv Charitable Trust and Kerala High Court in the case Lissie medical Institutions Vs CIT 76 DTR (Ker) 372 has decided the issue in the favour of the department after considering the decision of Hon'ble Supreme Court in the case of Escorts Ltd. (199 ITR 43). 3. "Whether on the facts of the case and in law the Id. CIT(A) erred in allowing the carry forward of deficit of Rs. 278,24,26,641/- and allowing set off against the income of the subsequent years allowing the deficit will tantamount to double deduction on account of expenditure out of exempt income. " 4. "Whether, on the facts and circumstances of the case and in law, the Id.CIT(A) erred in allowing to carry forward of deficit on account of excess expenditure and directing the Assessing Officer to allow carry forward of deficit on account of excess expenditure without appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile filing the return. Furthermore, the assessee also claimed depreciation of Rs. 23,21,54,114/- on same fixed assets during the year which the ld. AO has disallowed citing as double deduction. The ld. AO has mentioned as under :- I have considered the reply of the Assessee and also the ratio of jurisdictional High Court in the matter of CIT v/s Institute of Banking Personal Selection as reported in 264 ITR 110 (Bom). However, the Hon'ble Apex Court in 199 ITR 43 Union Bank of India Vs. Escorts Limited has held that double deduction cannot be allowed under any circumstances. It may also be pertinent to mention that the ratio of 264 ITR 110 (Bom) was pronounced by the Hon'ble Jurisdictional High Court without taking into consideration the ratio of Hon'ble Apex Court in 199 ITR 43. It may also be further pertinent to mention that the jurisdiction in the 264 ITR 110 (Bom) was accepted by the Department in view of low tax effect involved and not in view of the merits of the case. Therefore relying on the ratio of the Apex Court in 199 ITR 43 Escorts Limited V/s Union Bank of India, since the claim of depreciation of Rs. 23,21,54,114/- amounts to double deduction. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinguishable and does not refer to the issue of depreciation at all. Hence the said decision has no applicability to the issue of grant of depreciation. The ld. AR further submitted that in assessee's own case in earlier years, C.I.T.(A)/Tribunal allowed the depreciation, and the matter stands, concluded. 5.5 We have heard both the parties. Judicial pronouncements cited at bar and relied on by lower authorities had also been deliberated. The ld. DR relied heavily on the judgment of Hon'ble Apex Court in the case of Union of India Vs. Escorts Ltd., 199 ITR 43, whereby it was held that double deduction cannot be allowed. 5.6 On the other hand, ld. AR relied on the judgment of jurisdictional High Court in the matter of CIT Vs. Institute of Banking Personnel Selection, 264 ITR 110 (Bom). The ld. AR also referred to the case of DIT(E) Vs. Najam Baug Trust, judgment dated 14-2-2015, wherein the Hon'ble Bombay High Court has opined that no fault can be found in the order of the Tribunal relying on the judgment of the Hon'ble High Court in the case of Institute of Banking Personal Selection, 264 ITR 110. Thus, the Hon'ble High Court did not even admit the appeal. The ld. AR further point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change in terms of Section 11(6), which has been inserted and applicable with effect from 1st April, 2015 and not to the assessment years in question. The newly enacted sub- section relates to application of income. In view of the above amended provision, which is applicable w.e.f. Assessment Year 2015-2016, we do not find any infirmity in the order of CIT(A) for allowing assessee's claim for depreciation relying on the decision of jurisdictional High Court in respect of assessment years falling prior to 2015-2016. The decision of the Hon'ble jurisdictional High Court in the case of CIT Vs. Institute of Banking Personnel (2003) 185 CTR 492 (Bom) is squarely applicable in this case. 5.9 It is pertinent to mention here that in this case Hon'ble Delhi High Court while allowing assessee's claim for depreciation has already been dealt with the decision of Hon'ble Kerala High Court in the case of Lissie Medical Institutions, 245 KLR 525 as relied on by the ld. DR. Hon'ble High Court has further observed that decision of Hon'ble Supreme Court in the case of Escorts Ltd. (supra) is not applicable to the facts of the present case and observed as under :- "13. The judgment of the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . During the year, the assessee has deficit of Rs. 2,78,24,26,641/- which it carried forward to the next year to be set off against the income of the subsequent years. 6.1 The ld. AO has objected above action of the assessee and passed his assessment order mentioning therein :- "It is seen that the above claim is presumably based on the provisions under Section 72 provided in Chapter VI of I. T. Act, which provides for 'Carry Forward & Set off of Business Losses' dealing with Business Income. The provisions of Section 11, 12 and 13 dealing with Income of Charitable Institutions are silent about any such provision and do not provide for the carry forward and set off of losses/excess application of a particular year against the income of subsequent years. It is seen that the Assessee is placing the reliance on the ratio of Hon'ble Mumbai High Court in 264 ITR 110 Institute of Banking Personnel Vs CIT. It is further seen that in the aforesaid ratio, no SLP was filed by the department on the ground of low tax effect, not on merits of the issue. Therefore, there being no provision for carry forward of excess application as loss u/s.11 to the subsequent years, the same is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial pronouncement. The current year deficit and earlier years deficit should be allowed as per computation of Income. (v) The assessee further submitted as below :- "1. The ITO at page 6 of his order has clearly mentioned that there is no specific provision for carry forward of loss and the decision of Institute of Banking was not acceptable to the Department but was not challenged before the Supreme Court. 2. The ITO(E)(l) was of the view that carry forward of loss would not be allowed in view of the fact that 'The provisions of Section 11,12 & 13 dealing with income of Charitable Institutions are silent about any such provision and do not provide for the carry forward and set off of losses/excess application of a particular year against the income of subsequent years. It is seen that the Assessee is placing the reliance on the ratio of Hon'ble Mumbai High Court in 264 ITR 110 Institute of Banking Personal vis. CIT. It is further seen that in the aforesaid ratio, no SLP was filed by the department on the ground of low tax effect, not on merits of the issue. Therefore, there being no provision for carry forward of excess application as loss/deficit u/s. 11 to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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