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TMI Blog2021 (12) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. assessment year 2015-16 onwards and hence, same is not applicable for the year under consideration i.e. for A.Y.2014-15. In view of the above, we do not find any error in the order of the Learned CIT(A) on the issue in dispute and accordingly, the ground No.2 of the appeal of the Revenue, is dismissed. - ITA No.2468/Del/2018 - - - Dated:- 2-12-2021 - Smt. Diva Singh, Judicial Member And Shri O.P. Kant, Accountant Member For the Appellant : Sh. Sumit Kumar Varma, Sr. DR For the Respondent : Sh. Ruchesh Sinha, Advocate, Ms. Mansie Jain, Advocate ORDER PER O.P. KANT, AM: This appeal by the Revenue is directed against order dated 18/01/2018 passed by the Learned CIT(Appeals)-40, Delhi [in short the Ld. CIT(A)] for assessment year 2014-15, raising following grounds: 1. On the facts and in the circumstances of the case and in law, whether the Ld. CIT (A) has erred in law in allowing the assessee s claim of carry forward of current year s loss and set-ff of excess deficit pertaining to earlier years without appreciating the fact that the scheme of taxation of charitable or religious trust/institution as codified u/s 11, 12 and 13 there is no provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions from section 11 to 13 of the Act, and not on the basis of the other provisions of the Act, which are not applicable in the case of the assessee. Similarly, in case of the depreciation also the Learned DR submitted that application of the investment in assets has already been allowed to the assessee in earlier year and therefore further allowing the depreciation as application of the income in the year under consideration would amount to double deduction, which is not permitted in law. 5. The Learned Counsel of the assessee on the other hand submitted that the ground No. one of the appeal is covered in favour of the assessee by the order of the Coordinate Bench of the Tribunal in assessment year 2013-14. Regarding the ground No. 2, the learned Counsel submitted that issue in dispute is covered in favour of the assessee by the decision of the Hon ble Supreme Court in the case of Rajasthan and Gujarat the charitable foundation Poona (supra) and the amendment in Act for restricting allowance of depreciation in case of trust etc is effective from 01/04/2015 i.e. assessment year 2015-16, whereas assessment year involved in present appeal being assessment year 2014-15, said ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 has been made having regard to the benevolent provisions contained in the section 11 of the Act and that such adjustment will have to be excluded from the income of the trust under section 11(1)(a) of th Act. Our view is also supported by the judgment of the Gujarat High Court in the case of CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal [1995] 211 ITR 293. Accordingly, we answer question No.3 in the affirmative, i.e., in favour of the assessee and against the Department. 9. It is clear from the above that as many as five High Courts have interpreted the provision in an identical and similar manner. Learned counsel for the Revenue could not show any judgment where any other High Court has taken contrary view. Since we are in agreement with the view take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is to be allowed. A few of such decisions are as under: i.CIT vs. Maharana of Mewar Charitable Foundation, 164 ITR 439 (Raj)1987. ii.CIT vs. Shri Plot SwetamaberMurtiPujak Jain Mandal, 211 ITR 293 (Guj) 1995. iii.CIT vs. Matrisewa, Trust, 242 ITR 20 (Mad) 2000 iv.Govindu Naicker Estate vs. ADIT, 248 ITR 110 (Bom) 2003. v. CIT vs. Institute of Banking, 264 ITR 110 (Bom) 2003. vi. DIT vs. Raghuvanshi Charitable Trust, 197 Taxman 170 (Delhi) 2011 4.2.3 In the case of DIT vs. Raghuvanshi Charitable Trust (supra), the Hon'ble Delhi High court have held as under: 8. It would be fruitful to refer to the discussions contained in Institute of Banking Personnel Selection (IBPS)'s case (supra ), Per Hon'ble Mr. Justice S.H. Kapadia, which is advanced before us by the learned counsel for the revenue to repel the same in the following words : Now coming to question No. 3, the point which arises for consideration is : whether excess of expenditure in the earlier years can be adjusted against the income of the subsequent year and whether such adjustment should be treated as application of income in the subsequent year for charitable pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. 10. Before we part with, we may point out that learned counsel for the assessee in ITA No. 589/2008 and ITA No. 25/2009 submitted that the questions involves in these two appeals are purely academic. In these cases even in the current year, more than 75 per cent/85 per cent (as the case may be) of the income was applied for charitable purpose and therefore, no set off was required to be claimed. Further, it is not necessary to go into this issue once we Iwve decided the question of law in favour of the assessee. 4.2.4 In view of the discussion above and relying on the decision of the Hon'ble Delhi High Court in the case of DIT vs. Raghuvanshi Charitable Trust (supra), the Assessing Officer is directed to allow the set off of carried forward deficit. Grounds of appeal nos. 2,3 and 5 are allowed. 8. Thus, we find that, the Ld. CIT(A) in the year under consideration as well as the Tribunal in assessment year 2013-14 has allowed the ground of the assessee relying on the precedent of jurisdictional High Court. In view of the above, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly, we dismiss the ground No.1 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ensure that double benefit is not claimed and such notional amount does not get excluded from the condition of application of income for charitable purpose. 4.3.4 There are many conflicting judgments of various Hon'ble High Courts, including that of the jurisdictional High Court, both in favour and against allowability of depreciation. The Hon'ble Delhi High Court, in the case of Director of Income Tax (Exemption) vs. Charanjiv Charitable Trust [2014] 267 CTR 305, have held that if the cost of the asset has been allowed as deduction by way of application of income, then depreciation on the same asset cannot be allowed in computation of income of the trust (Para 30). However, in a subsequent decision, the Hon'ble Delhi High Court, 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, have held that the assessee is eligible for depreciation in the case of charitable or religious institution also. 4.3.5 As regards the reliance by the Assessing Officer on the judgment of the Hon'ble Supreme Court in the case of Escorts Limited Vs. Union of India, (supra), it is to be noted th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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