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TMI Blog2018 (4) TMI 2011X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s. 12AA and it had approval u/s. 80G(5)(vi) up to 31.03.2012. While making the assessment for assessment year 2012-13, the AO found that the assessee is selling books and articles at a profit and hence it is carrying on a trade with a mark up. Since, the assessee activities covered under purview of proviso to section 2(15), the AO assessed surplus arising out of sale of devotional articles, books etc at Rs. 76,79,169/- as income under the head business after allowing normal depreciation, treating the assessee as an AOP. He has held that since proviso of section 2(15) is invoked, the provisions of section 11 & 12 became inoperative and hence charged the receipt of voluntary contribution as income and did not allow expenses of capital nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Beverages Limited Vs CIT 314 ITR 314, depreciation is neither a loss nor expenditure. Depreciation is only an "allowance" and the view that depreciation is an "expenditure" to be treated as "application of income" for charitable purposes is incorrect. 2.3 The Ld. CIT(A) failed to appreciate the decision of the Hon'ble Kerala High Court in the case of Lissie Medical Institutions Vs CIT 348 ITR 344 (Ker.), which decision was rendered after seeking the view of the CBDT. In that case, the igh Court held that "if the assessee treats expenditure on acquisition of assets as application of income for charitable purposes under section 11(1)(a), then assessee cannot claim depreciation on value of such assets." 2.4 The Ld. CIT(A) ought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be allowed. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(Appeals) may be set aside and that of the Assessing Officer may be restored." The DR presented the case narrating the facts and the grounds of appeal and pleaded that the order of assessment may be upheld. Per contra, the AR submitted that this tribunal in ITA No 879/Mds/2015 and CO No. 130/Mds/2015 in assessment year 2011-12 has allowed the assessee's appeal. Based on which and also on the Jurisdictional High Court's decision, the CIT(A) allowed the assessee's appeal. The Revenue has filed an appeal only against the issue on depreciation. Supreme Court in the case of CIT-III, Pune vs Rajasthan and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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