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TMI Blog2013 (1) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. - Decided against revenue. - ITA No.1954/Mds./2012 - - - Dated:- 28-1-2013 - SHRI ABRAHAM P GEORGE AND SHRI VIKAS AWASTHY, JJ. For the Appellant : Shri Shaji P Jacob, Addl. CIT D.R. For the Respondent : Shri S.Sridhar, Advocate ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: In this appeal filed by the Revenue, its grievance is that CIT held assessee to be eligible for claiming depreciation as a part of the application of its income while considering its claim for exemption under sections 11 12 of the Income Tax Act, 1961 (in short the Act ). 2. Facts apropos are that assessee trust having registration under section 12AA of the Act had claimed capital expenditure of ₹ 12,13,81,530/- as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income was not permissible. According to Ld.D.R, Hon ble Kerala High Court had considered the decisions including that of Hon ble P H High Court in the case of M/s.Tiny Tots Education Society (supra) before coming to this conclusion. 5. Per contra, Ld. A.R submitted that when there was a cleavage of opinion between the various High Courts that in favour of the assessee had to be followed. Reliance was also placed on the decision of Co-ordinate Bench in the case of G.K.R. Charities Vs.DDIT(E) in [2012] 51 SOT 538 . 6. We have perused the orders and heard rival contentions. No doubt, Hon ble Kerala High Court in the case of Lissie Medical Institutions v .CIT(supra), after considering the decision of Hon ble P H High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under Section 11 of the Act, income arising from property held under Trust, constitutes the income of the Trust. It will mean income from property, business, dividends, interest on securities or other interest. In other words, the income for the purpose of Section 11 of the Act is the income as per the accounts of the Trust. It means, income in the commercial sense, without reference to the heads of income, specified in Section 14 of the Act, i.e. the book income and not total income as defined in Section 2(45) of the Act. This position is confirmed in CIT v. Trustees of H.E.H. Nizam s Supplemental Religious Endowment Trust (1981) 127 ITR 378 (A.P.), CIT v. Rao Bahadur Calawala Cunnan Chetty Charities (1982) 135 ITR 485 (Mad.) and CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er from another charitable Trust on which no cost was borne by the assessee Trust. Other High Courts which have also taken the view that depreciation is deductible are Hon'ble Karnataka High Court in the case of CIT v. Society of the Sisters of St. Anne (1984) 146 ITR 28 and Hon'ble Madhya Pradesh High Court in the case of CIT v. Rajpur Pallottine Society (1989) 180 ITR 579. In CIT v. Seth Manilal Ranchhoddas Vishram Bhovan Trust (1992) 105 CTR (Guj) 303 it was held by Hon'ble Gujarat High Court that depreciation should be allowed while computing such income under Section 11(i)(a) of the Act. Assessing Officer s stand that provision of computation of income under Section 11 does not contain any provision which may entitle an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus the assessee is eligible for claiming depreciation for all these assessment years. The orders of the authorities below are set aside and the A.O. is directed to allow the claim of depreciation. No doubt, the decision of Hon ble Kerala High Court was not considered by the Co-ordinate Bench. Nevertheless, as pointed out by Ld. A.R. at the best, the decision of Hon ble Kerala High Court brings in a cleavage of opinion on the issue where there was otherwise a unity among other High Courts on this issue. It is trite law when there is a cleavage of opinion on an issue between various High Courts, till such time the jurisdictional High Court has taken an adverse view, this Tribunal can elect to follow the view in favour of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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