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TMI Blog2018 (6) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... sent Appeals filed by the Revenue. Finding of the learned Tribunal of the accumulation of income not exceeding 15% of the income is concerned, the same is a pure finding of fact and does not give rise to any substantial question of law. Accordingly, We are of the opinion that the Appeals filed by the Revenue are devoid of any merits X X X X Extracts X X X X X X X X Extracts X X X X ..... income has to be computed according to the generally accepted principles and practice of Accountancy. Depreciation being diminution in the value of assets caused because of the wear and tear of usage, is an essential element of deduction in computing the income of an assessee under the generally accepted accountancy principles and practices. Therefore, so long as an assessee falling u/s.11 is not specifically prohibited by the IT Act from claiming depreciation as a deduction, it is permissible for that assessee to work out its income on the generally accepted principles and practice of accountancy. It is in this context the Circular No.5-P (LXXVI) of 1968 issued by the CBDT is relevant. The said circular has accepted the principles that eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in holding that the assessee is not entitled to claim depreciation allowance on the ground that section 32 is not applicable to the assessee. We hold that even if section 32 does not apply to the assessee, it is entitled for claiming depreciation allowance as it is entitled to follow the generally accepted principles and practice of accountancy in computing its income. 13. In his order, the Commissioner of Income-tax has mentioned that the assessee is deriving income from other sources like Market Fees, Leave and Licence Fees, Interest on Bank Deposits and other receipts, marketing of agricultural commodities etc. The law has prescribed specific rules for computation of income from other sources in Part 'F' under Chapter IV of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he controversy is no longer res integra, having been settled by the Hon'ble Supreme Court in the case of 'Commissioner of Income Tax-III, Pune v. Rajasthan & Gujarati Charitable Foundation Poona' [2018] 89 taxmann.com 127 [SC], by which the Hon'ble Supreme Court has affirmed the view taken by the Bombay High Court in 'Commissioner of Income Tax v. Institute of Banking Personnel Selection (IBPS)' [2003] 131 Taxman 386 [Bom.]. The relevant portion of the said Judgment of Bombay High Court as quoted by the Hon'ble Supreme Court and affirmed is quoted below for ready reference. "In the said judgment, [Bombay High Court] the contention of the Department predicated on double benefit was turned down in the following manner: 3. As stated above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with section 30 to section 43C, That, section 32(1) of the Act provides for depreciation in respect of building, plant and machinery owned by the assessee and used for the business purposes. It further provides for deduction subject to section 34. In that matter also, a similar argument, as in the present case, was advanced on behalf of the revenue, namely, that depreciation can be allowed as deduction only under section 32 of the Income Tax Act and not under general principles. The court rejected this argument. It was held that normal depreciation can be considered as a legitimate deduction in computing the real income of the assessee on general principles or under section 11(1)(a) of the Income Tax Act. The court rejected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l capital expenditure had been allowed in the year of acquisition of the assets. The assessee went in appeal before the Assistant Appellate Commissioner. The appeal was rejected. The Tribunal, however, took the view that when the Income Tax Officer stated that full expenditure had been allowed in the year of acquisition of the assets, what he really meant was that the amount spent 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 cannot be taken into account. This view of the Tribunal has been confirmed by, the B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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