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TMI Blog2015 (10) TMI 2472X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed by the learned CIT(A) in respect of assets, the cost of which is claimed as application. 2. We have heard the arguments of both the sides and also perused the relevant material on record. Learned representatives of both the sides have agreed that the issue involved in this appeal of the assessee is squarely covered in favour of the assessee by the decision of the coordinate bench of this Tribunal in the case of AP Olympic Association, Hyderabad for assessment year 2008-09 rendered vide order dated 7th February, 2014 in ITA No.1272/Hyd/2013. A copy of the said order is placed on record before us and a perusal of the same shows that a similar issue has been decided by the Tribunal in favour of the assessee by discussing all the relevant aspects as well as the relevant case laws on the issue elaborately in paras 7 to 16, which read as under- 7. We have considered the rival submissions and examined the issue. There is no dispute with regard to the fact that the assessee is registered under section 12AA of the I.T. Act. There is also no dispute that assessee has shown all the receipts in income-expenditure account and claimed various expenses in its computation of income, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 (P H) (HC) and CIT vs. Market Committee, Pipli (2011) 330 ITR 16, in arriving at that decision. Thus, there was a difference of opinion on the above issue at that point of time. 10. The Hon ble Punjab and Haryana High Court in the case of CIT vs. Manav Mangal Society 328 ITR 421 (P H) (HC) has considered and allowed the claim of depreciation. The amount spent on construction of School Building at Panchkula is a capital expenditure but for the purpose of section 11 it is an outgoing expenditure which is application of income of the appellant trust for charitable purpose. The appellant shall also be entitled to claim depreciation on the school building . 11. This decision was followed in the case of CIT vs. Tiny Tots Education Society (2011) 330 ITR 21 by the Hon ble Punjab Haryana High Court. 12. This issue has elaborately been discussed by the Hon ble Delhi High Court in the case of DIT vs. Vishwa Jagriti Mission in ITA.No. 140/2012 dated 29.03.2012 and took a over view of the existing decisions on the issue while holding as under : 11. The revenue is in appeal against the aforesaid order of the Tribunal. We are not inclined to admit the appeal and frame any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d back will become chargeable to tax u/s. 11(3) to the extent that they represent outgoings for purposes other than those of the trust. The amounts spent or applied for the purposes of the trust from out of the income computed in the aforesaid manner, should be not less than 75 per cent. Of the latter, if the trust is to get the full benefit of the exemption u/s. 11(1). 12. A similar view was earlier expressed by the Andhra Pradesh High Court in Commissioner of Income-tax. v. Nizam's Suppl. Religious Endowment Trust (1981) 127 ITR 378 and by the Madras High Court in Commissioner Of Income-Tax vs Rao Bahadur Calavala Cunnan Chetty Charities (1982) 135 ITR 485. The Madhya Pradesh High Court in CIT vs. Raipur Pallottine Society (supra) has held, following the judgment of the Karnataka High court cited above, that in computing the income of a charitable institution/trust, depreciation of assets owned by the trust/institution is a necessary deduction on commercial principles. The Gujarat High Court, after referring to the judgments of the Karnataka, Maharashtra and Madhya Pradesh High Courts cited above, also came to the same conclusion and held that the amount of depreciation d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the ITAT, Bangalore in the case of ACIT vs. Adichunchanagiri Shikshana Trust (2013) 31 taxmann.com 157 (Bangalore Trib.) wherein it was held that Charitable or Religious trust registered under section 12A can claim benefit under section 11 in the form of application of funds as well as depreciation under section 32 in respect of property held under the trust. The same opinion was followed by the ITAT, Bangalore Tribunal in the case of DDIT(E), Bangalore vs. Cutchi Memon Union (2013) 38 Taxman.com 276 (Bangalore-Trib.) wherein also similar opinion was expressed. 14. Thus, on this issue, there are decisions of Hon ble Gujarat High Court, Madhya Pradesh High Court, Kerala High Court, Bombay High Court, Punjab and Haryana High Court and Delhi High Court in favour of the assessee, whereas, there is only a lone judgment of Hon ble Kerala High Court against the above opinion confirming the Revenue s contention. In view of the majority opinion of various High Courts, we are of the opinion that amount of depreciation debited to the account of charitable institution has to be allowed in order to arrive at the income available for application to the charitable purpose. 15. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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