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TMI Blog2021 (4) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... NT (BY SRI.A. MAHESH CHOWDHARY, ADVOCATE-VC) JUDGMENT SATISH CHANDRA SHARMA. J. 1. The present Writ Appeal is arising out of judgment dated 24.07.2019 passed by the Income Tax Appellate Tribunal in appeal No.ITA No.1383/Bang/2018. 2. The facts of the case reveal that the assessee is an educational society and had filed return of income for the year 2013-14 by claiming depreciation and also set off/carry forward of excess application. Assessment order was passed on 22.02.2016 under Section 143(3) of the Income Tax Act, 1961 by disallowing the said claim. The assessee preferred an appeal before the first Appellate Authority and the appeal was allowed. Thereafter, the revenue preferred the above appeal before the Tribunal. The Tribunal dismissed the appeal preferred by the revenue on the ground that the issue involved in the matter stood concluded on account of the judgment delivered by the Division Bench of this Court in the case of CIT (E) vs. Ohio University Christ College reported in (2018) 99 taxman.com 377. 3. There is a delay of 65 days in filing the appeal. After hearing the learned counsel for the parties, I.A.No.1/2020 stands allowed for the reasons menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ........ (2) whether on the facts and circumstances of the case, the tribunal is right in confirming the order of the CIT directing the assessing authority to allow the claim of assessee for set off of brought forward excess application of income/loss of income/laws of income for earlier years by relying upon the decision of this Hon'ble Court in case of ACIT vs Sisters of St.Anne (reported in 146 ITR page 28 and circular No. 5-P (lxx)-6 of 1968 when the assessing authority rightly disallowed the claim by holding that no such set of brought forward excess application of income/loss of income of earlier years are permitted under the provisions of the act in the case of educational institution? Hon'ble court observed and held as under: 16. In so far as the second question proposed by the Revenue, quoted above is concerned also, we find that the Tribunal's findings in this regard do not give rise to any substantial question of law. The said findings are quoted below for ready reference : 5.1 In the course of assessment proceedings, the Assessing Officer observed that the assessee had claimed application of income on account of expenditure of ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof has held as under: 5.3.3 Further, the CBDT Circular No.5-P (LXX)-6 of 1968 cited by the assessee makes it clear that income should be understood in its commercial sense: in the case of trusts also and therefore the commercial principle enunciated by the Hon'ble Karnataka High Court in the above referred case of Sisters of St. Anne (supra) applies to trusts as well. In view of the factual and legal matrix of this issue in the case on hand as discussed above, we concur with the decision of the learned CIT (Appeals) in cancelling the disallowance made by the Assessing Officer and in allowing the amortization of expenses. Consequently, Ground No.B (1 to 6) of the Revenue's appeal for Assessment Year 2008-09 and Ground No.0 for Assessment Year 2009-10 are dismissed. 17. In our opinion, the matter is squarely covered by a decision of the cognate Bench of this Court in the case of CIT v. Society of the Sisters of St. Anne (1984) 16 Taxman 400/146 ITR 28 (Kar.) wherein the congnate Bench of this Court held that even the depreciation not involving any cash outflow is also in the character of expenditure and therefore such depreciation is nothing but decrease in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o get the full benefit of the exemption under section 11(1). 12. In CIT v. Trustee of H.E.H. The Nizam's Supplemental Religious Endowment Trust (1981) 127 ITR 378, the Andhra Pradesh High Court has accepted the accounts maintained in respect of the trust in conformity with the principles of accountancy for the purposes of determining the income derived from the property held in trust.' 18. In view of the aforesaid findings of the learned Tribunal, allowing any expenditure of the earlier year which has been brought forward and set off in the year under consideration, is a justified finding of fact based on the correct interpretation of law and the judgment relied upon by it rendered by the cognate Bench. Therefore, the same does not call for interference. A similar view was also taken by the Division Bench of Bombay High Court in CIT Vs Institute of Banking Personnel Selection (IBPS) 20031 264 ITR 110/131 Taxman 386 wherein the Division Bench of Bombay High Court held that the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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