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TMI Blog2022 (10) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... venue. Claim of carry forward of unabsorbed excess of expenditure over income and unabsorbed depreciation - CIT(A) placing reliance on the decision of FramjeeCawasjee Institute [ 1992 (7) TMI 331 - BOMBAY HIGH COURT] wherein it was held that the Tribunal, however, took the view that when the ITO stated that full expenditure had been allowed in the year of acquisition of assets, what he really meant was that the amounts spent on acquiring those assets had been treated as application of income of the trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing the income from those assets in subsequent years, depreciation in respect of those assets cannot be taken into account. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his appeal filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-2, Guntur [Ld. CIT(A)] in ITA No.10124/GNT/CIT(A)-2/2018-19, dated 26/02/2020 arising out of the order passed U/s. 143(3) of the Income Tax Act, 1961 [the Act] for the AY 2015-16. 2. Brief facts of the case are that the assessee is a charitable institution registered U/s. 12A of the Act and under Foreign Contribution Regulation Act (FCRA) filed its return of income for the AY 2015-16 admitting a total income of Rs. NIL. The return was summarily processed U/s. 143(1) of the Act. Subsequently, the case was selected for complete scrutiny under CASS to verify Large Corpus donations received by the Trust and statutory notices U/s. 143(2) and 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,44,31,936/- towards loss on assets written off and disallowed the same citing the Amendment made to section 11(6) of the Act w.e.f 1/4/2015. The Ld. AO completed the assessment by making the above additions and raised a tax demand of Rs. 73,51,516/-. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) considering the submissions made by the assessee and by admitting the additional ground raised by the assessee, allowed the appeal. Aggrieved by the order of the Ld. CIT (A) the Revenue is in appeal before the Tribunal. 3. The Revenue has raised the following grounds of appeal before the Tribunal: (i) The Ld. CIT(A) erred in both law and facts of the case. (ii) The Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the above donation was made as corpus donation in order to Build Corpus Fund for running of the VMSS activities in the long run. SVVFUIP has stated that it is a specific direction to treat the donation as Corpus Fund Donation. Similarly, the Ld. AR also further submitted that section 11(6) was introduced by the Finance Act, 2014 w.e.f 1/4/2015 and it is a settled law that it has to be applied prospectively. The Ld. AR also further submitted that the assessee filed an additional ground before the Ld. CIT(A) with respect to unabsorbed depreciation and unabsorbed expenditure over income which was admitted by the Ld. CIT(A). The Ld. AR therefore pleaded that the order of the Ld. CIT(A) be upheld. 5. We have heard both the parties and peru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention of the donor is to build the corpus fund for the running of the VMSS activities in the long term, they cannot be treated as general donations since specific direction has been given. I direct the AO to treat the donation of $6,50,000 as corpus fund. Ground No.3 is adjudicated. 6. We agree with the findings of the Ld. CIT(A) and hence no interference is required on this ground. Accordingly, this ground raised by the Revenue is dismissed. 7. The ground No.(iii) raised by the Revenue regarding allowing the claim of carry forward of unabsorbed excess of expenditure over income and unabsorbed depreciation, we find that the assessee has filed a petition u/s. 154 of the Act before the Ld. AO. However, the Ld. AO has rejected the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as well . 8. The facts of the present case are similar to the facts of the above referred case. Respectfully following the judicial discipline, the Ld. CIT(A) directed the AO to allow claim of unabsorbed depreciation of earlier years of Rs. 4,51,52,791/-. 9. We find no infirmity in the order of the Ld. CIT(A) and hence no interference is required on this ground. Thus, this ground raised by the Revenue is dismissed. 10. Similarly, the allowance of excess of expenditure over income in earlier years as carry forward loss the Ld. CIT (A) relying on the decision of the Rajasthan High Court in the case of CIT vs. Maharana of Mewar Charitable Foundation 164 ITR 439(Raj) Gujarat High Court in the case of CIT vs. Sri Plot Swetamber Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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