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TMI Blog2019 (2) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... HRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Appellant : Shri Praveen Kumar, Sr. DR For The Respondent : None present ORDER PER O.P. KANT, A.M.: This appeal by the Revenue is directed against the order dated 25th March, 2015 passed by the Ld. CIT(A)-40, New Delhi, [in short the Ld. CIT(A) ] for assessment year 2007-08, raising following grounds: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the claim of depreciation of ₹ 80,66,227/- to the assessee ignoring the fact that the assessee has claimed the amount incurred on purchase of assets in earlier years as application of income, on which depreciation is cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not eligible for any type of depreciation as the assessee is a charitable society and not a business entity and as such is not eligible for deprecation u/s 32(1). 4.9 However, the Hon'ble Delhi High Court in a subsequent decision in the case of DIT(Exemption) vs. Indraprastha Cancer Society in ITA No. 240, 348, 406, 463 464/2014 vide the order dated 18/11/2014 has again held that the assessee is eligible for depreciation in the case of charitable or religious institution also. 4.10 After considering all the facts and circumstances of the case, I am of the view that it is not only illegal but also immoral and unethical to claim depreciation on the capital assets as the entire capital expenditure has been claimed as a ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt para of the above decision is reproduced as under: .. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit to the assessee. Though it appears that in most of these cases, the CIT (Appeals) had affirmed the view, but the ITAT reversed the same and the High Courts have accepted the decision of the ITAT thereby dismissing the appeals of the Income Tax Department. From the judgments of the High Courts, it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Trust from the property held for charitable or religious purposes and it also provides for application and accumulation of income. On the other hand, section 28 of the Income Tax Act deals with chargeability of income from profits and gains of business and section 29 provides that income from profits and gains of business shall be computed 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Institute [1993] 109 CTR 463. In that case, the facts were as follows: The assessee was the Trust. It derived its income from depreciable assets. The assessee took into account depreciation on those assets in computing the income of the Trust. The ITO held that depreciation could not be taken into account because, full 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 ITO 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 'applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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