9911796707
TMI Blog2015 (10) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing the claim of depreciation when the cost of acquisition of asset was treated as application of income for the purpose of claiming exemption under section 11 of the Act. 2. Counsel for the assessee submits that the issue in appeal has been decided by this Tribunal in the assessee's own case for the assessment years 2006-07 and 2007-08 in I. T. A. Nos. 681 and 682/Mds/2010 dated March 25, 2011 and a copy of the said order is placed on record. 3. The Departmental representative submits that the similar issue has been decided against the assessee by the hon'ble Delhi High Court in the case of DIT (Exemptions) v. Charanjiv Charitable Trust [2014] 267 CTR (Delhi) 306. 4. Heard both sides. Perused orders of the lower authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us, the learned authorised representative, strongly assailing the orders of the Commissioner of Income-tax (Appeals), submitted that the claim made for depreciation was for the use of the assets while claim for the capital outgo as an application was on a different footing. According to him, just because capital expenditure was considered as application of income, it could not be said that the assessee would not be entitled to claim depreciation thereon. 4. Per contra, the learned Departmental representative supported the orders of the authorities below. According to him, the claim of the assessee if allowed, would result in double deduction. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or repairs reserve are to be deducted as held by the Mumbai Bench of this Tribunal in ITO v. Trustees of Balkan-Ji-Bari [1979] 2 Taxman 377 (Bom). The hon'ble Bombay High Court had rejected a reference application of the Revenue in the case of DIT v. Framjee Cawasjee Institute [1993] 109 CTR (Bom) 463, holding that the answer to the question whether depreciation was allowable to a charitable trust was self-evident, even if the capital value of the assets on which depre ciation was claimed had been allowed as a deduction under section 11, as an application of income for religious or charitable purposes. Once again in CIT v. Institute of Banking [2003] 264 ITR 110 (Bom), the hon'ble Bombay High Court held that depreciation should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of the same amount as application. Thus depreciation is to be deducted to arrive at income and it is not application of income. No doubt, the Department has relied on the decision of the Supreme Court in the case of Escorts Ltd. v. Union of India [1993] 199 ITR 43 (SC). However, in this case the issue before the hon'ble Supreme Court was that whether both depreciation under section 32 and capital expenditure on scientific research under section 35(1)(iv) can be claimed as deduction. Reference to this decision cannot be drawn as in the case of Escorts Ltd. v. Union of India [1993] 199 ITR 43 (SC) both were deductions under the head 'business income' whereas in case of a charitable trust depreciation is a deduction to arrive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al representative, it appears that none of these High Court decisions have been considered by the Delhi High Court. The hon'ble Delhi High Court without considering the decisions of other High Courts especially the hon'ble Bombay High Court in the case of CIT v. Institute of Banking [2003] 264 ITR 110 (Bom) and the hon'ble Karnataka High Court in the case of CIT v. Society of the Sisters of St. Anne [1984] 146 ITR 28 (Karn) which are directly on the issue and decided in favour of the assessee, has taken a contrary view in the case of DIT (Exemption) v. Charanjiv Charitable Trust [2014] 267 CTR (Delhi) 306 following its own judgment in the case of DIT (Exemptions) v. Vishwa Jagrati Mission in I.T. Appeal No. 140 of 2012 dated Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
