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TMI Blog2017 (3) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... for advancement of higher technical education to deserving students. It cannot be doubted that advancement of education is a 'charitable purpose'. The candidate, beneficiary, was directly or indirectly not related to Members of Society nor otherwise has any bearing or connection with the Society Members. Financial status of the said student or other things are immaterial so far as purpose for which scholarship to Adheesh Bhagat is concerned. Hence we are in agreement with the view taken by CIT(A) as also Tribunal that payment of scholarship was admissible as charitable expenditure. Question answered in favour of Assessee. - Income Tax Appeal No. 102, 94 of 2015, Income Tax Appeal No. 41 of 2016 - - - Dated:- 7-3-2017 - Hon'ble Sudhir Agarwal And Hon'ble Ravindra Nath Mishra-II, JJ. For the Appellant : Alok Mathur For the Respondent : Abhinav Nath Tripathi, Amrendra Nath Tripathi, Shambhu Chopra ORDER 1. All these three appeals filed under Section 260A of Income Tax Act, 1961 (hereinafter referred to as Act, 1961') have arisen from two sets of judgments and order of Income Tax Appellate Tribunal (hereinafter referred to as Tribunal ) raising same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and allowed as deduction on account of expenditure, tantamount double deduction. (2) Whether the Tribunal is justified in law and on facts in deleting the addition of ₹ 1,66,97,767/- made by the Assessing Officer on account of dis-allowance of depreciation without appreciating the fact that the Assessee Society is claiming expedition under Section 11 of Act, 1961. Income Tax Appeal No. 41 of 2016: (1) Whether on the facts and circumstances of case, Tribunal is justified by upholding the order of Commissioner of Income Tax (Appeal) for allowing the depreciation of ₹ 1,63,63,436/- on capital expenditure without appreciating the fact that entire cost of capital expenditure has already been allowed as deduction under Section 11 of Act, 1961 against the income of trust in respective years and, therefore, allowance of revenue expenditure under Section 11 of Act, 1961 on whose assets, which had already been claimed and allowed as deduction on account of capital expenditure, tantamount double deduction. (2) Whether on the facts and circumstances of case, Tribunal is justified in upholding the order of Commissioner of Income Tax (Appeals) on the issue of deletion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Disputed year of assessment was 1960-61. Provisions of Income Tax Act, 1922 (hereinafter referred to as Act, 1922 ), on this aspect, were considered. Therein, computation of business income for the purpose of income tax was done in accordance with Section 10 of Act, 1922. In the process of such computation, Act, 1922 provided for two important deductions (among others), in respect of capital assets, employed in the business. The first was deduction under Clause (vi) of Section 10(2) of Act, 1922, an allowance in respect of depreciation of building, machinery, plant or furniture being the property of Assessee and used for the purposes of business, at a prescribed percentage of written down value of such assets. This allowance was calculated, in respect of year of acquisition of the property, at a percentage of its actual cost to the Assessee and in subsequent years at a graduated scale on the basis of the actual cost less the depreciation allowances granted in the preceding years. In strict sense, this was an allowance of capital nature. The second allowance which was not there in Act, 1922 initially but introduced by Income Tax (Amendment) Act, 1946 (hereinafter referred to as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of Trust. 9. We find that a large number of High Courts have considered this aspect and taken a view in favour of Assessee. 10. One of the earliest judgment is from Karnataka High Court in Commissioner of Income Tax, Karnataka-I Vs. Society of the Sisters of St. Anne 1984 (1460 ITR 28 (Kar.). Court observed that income derived from property held under trust cannot be total income because Section 11(1) shows that former shall not be included in latter, of the person in receipt of the income. Depreciation is nothing but decrease in value of property through wear, deterioration or obsolescence and allowance is made for this purpose in book keeping, accountancy, etc. Same view thereafter has been expressed by different High Courts, namely, Madhya Pradesh High Court in Commissioner of Income-Tax Vs. Raipur Pallottine Society 1989 (180) ITR 579 (MP), Gujrat High Court in Commissioner of Income-Tax, Vs. Seth Manilal Ranchoddas Vishram Bhavan Trust (1992) 198 ITR 598 (Guj), Calcutta High Court in Commissioner of Income-Tax, Vs. Bhoruka Public Welfare Trust 1999 (240) ITR 513 (Cal.), Punjab and Haryana High Court in Commissioner of Income Tax Vs. Market Committee, Pip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax and others Vs. Al-Ameen Charitable Fund Trust and others (supra) and following Commissioner of Income-Tax Vs. Vatika Township P. Ltd. 2014 (367) ITR 466 (SC) Court has held that the aforesaid amendment is prospective and operative from 01.04.2015. 15. We find ourselves in respectful agreement with the decisions of various Courts noticed above. 16. To be fair enough for learned counsel for Revenue, we may notice that there is a divergent view expressed by Kerala High Court in Lissie Medical Institutions Vs. Commissioner of Income Tax 2012 (348) ITR 344 (Ker) wherein it has placed reliance on Supreme Court's judgment in Escorts Limited and others Vs. Union of India and other (supra) but we have already discussed that the judgment in Escorts Limited and others (supra) was in respect of different provision while scheme of Section 11 is/was different till 01.04.2015. We, therefore, find ourselves unable to agree with the view taken by Kerala High Court and respectfully differ therefrom. 17. The discussion made above leads to inescapbale conclusion that Question-(1) in the aforesaid appeals has to be answered in favour of Assessee and against Revenue. 18. Now com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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