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TMI Blog2015 (9) TMI 1645X X X X Extracts X X X X X X X X Extracts X X X X ..... of income of the trust in the year of acquisition, depreciation is allowable in subsequent years. Disallowance of carry forward of deficit - amount was claimed as set-off against the accumulated carried forward deficit of earlier years - HELD THAT:- It is a settled issue that any surplus amount of the current year can be set-off against the brought forward deficit of the earlier years and the same view was even supported by judgment of CIT vs. Institute of Banking [2003 (7) TMI 52 - BOMBAY HIGH COURT]. Considering the same, CIT (A) has rightly adjudicated the issue by granting relief to the assessee - I.T.A. No.3775/M/2015 - - - Dated:- 30-9-2015 - SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER For the Appellant : Shri Jayesh Chugh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. Whether, on the facts of the case and in law, the Ld CIT (A) erred in allowing the carry forward deficit of ₹ 65,41,073/- and allowing set off against the income of the subsequent years, allowing the deficit will tantamount to double deduction on account of expenditure of exempt income. 4. Whether on the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in allowing to carry forward of deficit on account of excess expenditure and directing the Assessing Officer to allow carry forward of deficit on account of excess expenditure without appreciating the fact that this would have the effect of granting double benefit to the assessee first as accumulation‟ of income u/s 11(1)(a) or as corpus dona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, CIT (A) deleted the disallowance on account of depreciation of ₹ 57,29,927/- and held that the said judgment of the Hon‟ble Supreme Court in the case of Escorts Ltd (supra) is not applicable to a charitable organization as it pertains to claim of depreciation under another section of the Act when or more depreciation had already been provided u/s 35 of the Act. Aggrieved with the decision of the CIT (A), Revenue is in appeal before the Tribunal by raising the above mentioned ground nos.1 and 2. 4. During the proceedings before the Tribunal, Ld Counsel for the assessee heavily relied on the order of the CIT (A) and reiterated submissions made before the lower authorities. 5. On the other hand, Ld DR for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had already been provided u/s 35. The Hon‟ble Supreme Court in that case was dealing with a case relating to two deductions both under sections 10(2)(vi) and 10(2)(xiv) of the 1922 Act or both under section 32(1)(ii) and 35(1)(iv) of the Act. The assessee therein had incurred expenditure of a capital nature on scientific research relating to the business which resulted into acquisition of an asset. The assessee had sought to claim a specific percentage of the written down value of the asset as depreciation and at the same time claimed deduction, in five consecutive years of the expenditure incurred on the acquisition of the asset. The judgment of the Hon‟ble Supreme Court in Escorts Ltd is thus distinguishable for the above re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the trust in the year of acquisition, depreciation is allowable in subsequent years. The said judgment of the Hon‟ble jurisdictional High Court is binding on the Tribunal. Considering the above propositions, in my opinion, CIT (A) has rightly adjudicated the issue and deleted the disallowance made by the AO. In my considered opinion, the decision taken by the CIT (A) in allowing the assessee‟s appeal is fair and reasonable and it does not call for any interference. Accordingly, ground nos. 1 and 2 raised by the Revenue are dismissed. 8. Ground nos. 3 to 5 relate to the disallowance of carry forward of deficit of ₹ 65,41,073/-. In the return of income, the said amount was claimed as set-off against the accumula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, I hold that the AO was wrong in disallowing the set-off of brought forward deficit of earlier years against the current year‟s surplus of ₹ 65,41,073/-. The AO is directed to allow the same. 11. It is a settled issue that any surplus amount of the current year can be set-off against the brought forward deficit of the earlier years and the same view was even supported by the Hon‟ble jurisdictional High Court vide its judgment in the case of CIT vs. Institute of Banking (supra). Considering the same, I am of the opinion that the CIT (A) has rightly adjudicated the issue by granting relief to the assessee. Therefore, the CIT (A)‟s decision is fair and reasonable and it does not call for any interference. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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