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TMI Blog2012 (4) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... er the A.O., this will result in claiming of double deduction. Relying on the decision of Hon'ble Apex Court in the case of Escorts Ltd. v. Union of India (199 ITR 43), he disallowed the claim of depreciation. 3. Appeal of the assessee before ld. CIT(Appeals) did not meet with any success, though the assessee relied on the decision of Hon'ble Bombay High Court in the case of CIT v. Institute of Banking Personnel Selection (264 ITR 110) and that of Hon'ble Punjab & Haryana High Court in the case of CIT v. Market Committee, Pipili (330 ITR 16). According to ld. CIT(Appeals), Hon'ble jurisdictional High Court in the case of CIT v. Rao Bahadur Calavala Cunnan Chetty Charities (135 ITR 485) had held that income for the purpose of applying provisions of Section 11 of the Act had to be understood in the normal parlance without invoking Section 14 of the Act. As per ld. CIT(Appeals), Hon'ble jurisdictional High Court had clearly ruled that income from properties held under Trust had to be arrived at in a normal commercial manner. Hence, according to him, assessee was not eligible to claim depreciation of capital assets acquired for which the whole of the expenditure was earlier claimed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of depreciation made at Rs. .2,72,85,356/- which was completed as "No Demand" while disallowing the depreciation claim of the assessee, the Assessing Officer has stated that when the assessee had claimed the cost of addition to assets as application of funds, claim of depreciation on the same assets could not be allowed. (b) The return of income filed for (i) Assessment Year 2005-06 declares NIL income and gross receipts of Rs. . 22,17,53,309/- in which the claim of depreciation made at Rs. .2,82,17,782/- which was completed as "No Demand" while disallowing the depreciation claim of the assessee, the Assessing Officer has stated that when the assessee had claimed the cost of addition to assets as application of funds, claim of depreciation on the same assets could not be allowed. (c) The return of income filed for (i) Assessment Year 2006-07 declares NIL income and gross receipts of Rs. .21,71,47,737/- in which the claim of depreciation made at Rs. . 2,64,72,392/- which was completed as "No Demand" while disallowing the depreciation claim of the assessee, the Assessing Officer has stated that when the assessee had claimed the cost of addition to assets as application o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pent on acquiring those assets had been treated as "application of income" of the trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing income from those assets in subsequent years, depreciation in respect of those assets can not be taken into account. This view of the Tribunal has been confirmed by the Bombay High Court in the above judgement i.e. Director of Income-tax(Exemption) v. Framjee Cawasjee Institute [1993] 109 CTR 463. Hence, this issue was covered by the decision of the Bombay High Court in the above judgement. Consequently, this issue was answered in the affirmative i.e. in favour of the assessee and against the Department. 10. The ratio of the above mentioned decision reported in 264 ITR 110 (2003) in the case of CIT vs. Institute of Banking, wherein the Bombay High Court has held that the Tribunal was right in law in directing the Assessing Officer to allow depreciation on the assets the cost of which has been fully allowed as application of income u/s.11 in the past years squarely covered in the instant case. 11. In the advent of the above discussions and respectfully following the decision of the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as Hon'ble Punjab & Haryana High Court, Ld. Counsel for the assessee has strongly pleaded that since the issue is squarely covered in favour of the assessee, not by one High Court but by second High Court also in which Supreme Court decision's case of Escort Ltd. Vs. UOI and others has been discussed, has concluded to hold the question proposed in favour of the assessee, therefore being covered the matter, order of the CIT(A) for all the years are liable to be upheld. It was thus urged for upholding the impugned orders and for dismissing all the appeals of the Revenue. 10. After hearing both the sides, considering the material as well as case laws cited by the rival side, we find that in the recent judgement of the Hon'ble High Court of Punjab & Haryana in the case of CIT Vs. M/s.Tiny Tots Education Society (supra) has concluded to decide the issue in favour of the assessee as per paras 4 to 7 as under:- "4. Ld. Counsel for the Revenue submits that in view of judgement of the Hon'ble Supreme Court in Escorts Ltd. and another v. Union of India and others [1993] 199 ITR 43, the Assessee could not claim deduction when its income was exempt, as it will amount to getting d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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