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TMI Blog2018 (11) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... BOMBAY HIGH COURT] - decided against revenue Carry forward of deficit and allowing set off against the income of subsequent years - Held that:- Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment had been made having regard to the benevolent provisions contained in section 11 of the Act and such adjustment will have to be excluded from the income of the trust under section 11(1)(a). - Decided against revenue - ITA No. 3310/Mum/2017 - - - Dated:- 29-10-2018 - Sri Mahavir Singh, JM And Sri Manoj Kumar Aggarwal, AM For the Appellant : Shri Chaitanya S. Anjaria, DR For the Respondent : Shri Firoz B. Andhyarujina Shri T.K. Doctor, ARs ORDER PER MAHAVIR SINGH, JM: This appeal by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-1, Mumba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment has not accepted the decision on merit and filed SLP, but subsequently withdrawn the same as there was no claim of depreciation on exempted assets. Moreover, the Revenue has filed SLPs on this issue in other cases inclusive the case of GD. Birla Medical Research Educational Foundation (S.L.P (C) No. 24904 of 2016 (C.A. No. 8294 of 2016) and in this case leave has been granted by the Hon ble Apex Court and in all cases issue is pending for adjudication before the Hon ble Apex Court. 3. Brief facts relating to the above issue are that the assessee trust claim depreciation and capital expenditure i.e. addition to fixes assets in its computation. According to AO, this claim of depreciation and capital expenditure tantamount to double deduction as the assessee has already claimed deduction under section 11 of the Act and again deprecation claimed amounting to double claim in the form of application of income. Accordingly, he disallowed the depreciation. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) relying on the decision of Hon ble Bombay High Court in the case of CIT vs. Institute of Banking Personnel Services (2003) 264 ITR 110 (Bom.) and relying on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the submissions of the appellant, the decision of my learned predecessor as reproduced for the sake of convenience on this issue and in view of the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. Institute of Banking Personnel 264 ITR, following the said decision, Ground No.1 2 of appeal is allowed. ii. From above, it may be noted that my Ld. predecessor has followed the order of CIT(A) in A.Y. 2007-08. This order has been upheld by Hon'ble ITAT and also by Hon'ble High Court. As there is no change in the facts, observations of the A.O in his order and submissions of the appellant, following the above observations of my Id. Predecessor, Ground of appeal No 1 is allowed. Aggrieved, now Revenue is in appeal before us. 4. The learned Counsel for the assessee before us, filed copy of Tribunals order in assessee s own case for AY 2011-12 in ITA No.02/Mum/2016 vide order dated 02.05.2018, wherein the issue was decided against Revenue by observing as under: - 2.3 We have heard rival submissions and perused the material before us. We find that in the case of Institute of Banking and Persona Selection (supra) has held as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirm the order of CIT(A) deleting the addition. This issue of Revenue s appeal is dismissed. 6. The next issue in this appeal of Revenue is against the order of CIT(A) allowing carryforward of deficit and allowing set off against the income of subsequent years. For this Revenue has raised the following grounds: - 4. Whether on the facts of the case and in law the ld. CIT(A) erred in allowing the carry forward of deficit of ₹ 66,33,560/- and allowing set off against the income of the subsequent years. 5. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the claim of the assessee for carry forward for the said deficit, ignoring the fact that there was no express provision in the IT Act, 1961 permitting allowance of such claim. 6. Whether, on the facts and in the circumstances of the case and in law, the Ld. CITA) erred in allowing the claim of the assessee for carry forward of the said deficit by relying upon the judgment of Hon'ble Bombay High Court in the case of Institute of Banking Personnel Selection, ignoring the fact that the Department has not accepted the said decision of the jurisdictional Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant's submission above in para-4.3 of the order. Thus, taking note of the jurisdiction High Court in the case of CIT vs Institute of Banking Personnel Selection 264 ITR 110 (Bom), I hold that deficit of ₹ 2,76,40,494/- will be considered as application against income of the current assessment year of the appellant trust. 4.5 I also find that that the AM. has made addition of ₹ 63,87,142/-, which was already accepted by his predecessor as deemed application as per proviso to section 11 (1)(a) of the IT Act in the preceding assessment year. Thus making subsequent addition is not justified without any reason on the part of the A.O. Accordingly after discussion made above and following the decision of Hon bIe High Court in the case of CIT vs Institute of Banking Personnel Selection 264 ITR 110 (Bom), the AOs action was not justified and accordingly the addition made by the AO is deleted. In view of the above facts and circumstances of the case and that the issue is adjudicated in favour of the appellant on this Ground, I find no such evidence and material on this issue requiring any deviance from the appellate order. Accordingly, the Ground of appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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