The Dy. CIT( Exemption), Circle-1, Ahmedabad V. M/s. Nirma University, Ahmedabad

ITA 1405/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5978 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Retrospective amendment; Capital expenditure
• Section: 32; 11

Judgement Text

, CH CHCH CH IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER !# I.T.A. NO. 1405/AHD/2016 ( / ASSESSMENT YEAR : 2009-10) DCIT(EXEMPTION), CIRCLE -1, AHMEDABAD. # VS. M/S. NIRMA UNIVERSITY, SARKHEJ GANDHINAGAR HIGHWAY, P.O. CHANDLODIYA, AHMEDABAD. $ # % & # PAN/GIR NO. : AAATT 6829 N ( !$' / APPELLANT ) .. ( ($' # RESPONDENT ) !$') # APPELLANT BY : SHRI MUDIT NAGPAL, SR.D.R. ($'*) / RESPONDENT BY : SHRI HIMANSHU SHAH, A.R. + ,*-. / DATE OF HEARING 26/02/2018 /012*-. / DATE OF PRONOUNCEMENT 27/02/2018 3# O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD, VIDE APPEAL NO.CIT(A)9/637/ITO(EX.)/14-15 DATED 17/03/2016 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. SOLE GRIEVANCE OF THE REVENUE IS WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFI ED IN ALLOWING THE ITA NO.1405/AHD /2016 DCIT VS. M/S. NIRMA UNIVERSITY ASST.YEAR 2009-10 - 2 - ASSESSEES APPEAL AND DELETING THE ADDITION OF RS.3 ,52,47,500/- IN RESPECT OF DISALLOWANCE OF DEPRECIATION. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE TRUST IS ENGAGED IN EDUCATIONAL ACTIVITIES. IN THE YEAR U NDER CONSIDERATION, TRUST HAS CLAIMED DEPRECIATION AMOUNTING TO RS.3,52,47,50 0/- AND CARRIED FORWARD LOSS OF RS.4,29,74,728/-. THEREAFTER, LD. A O ISSUED A SHOW-CAUSE NOTICE TO THE ASSESSEE THAT WHY CLAIM OF DEPRECATIO N AND CARRIED FORWARD LOSSES SHOULD NOT BE DISALLOWED. IN REPLY, IT IS SU BMITTED BY THE ASSESSEE THAT DEPRECIATION AND CARRIED FORWARD LOSSES WAS RI GHTLY CLAIMED AND ACCORDANCE WITH THE PROVISION OF INCOME TAX LAW AND SIMILAR CLAIM WAS ALLOWED BY THE ITAT IN ASSESSEES OWN CASE FOR ASST . YEAR 2008-09. BUT LD. AO WAS NOT AGREED WITH THE CONTENTION OF THE AS SESSEE. THEREFORE, HE DISALLOWED THE CLAIM OF THE ASSESSEE AND MADE AN AD DITION OF RS.3,52,47,500/-. 4. AGAINST THE SAID ADDITION ASSESSEE PREFERRED FIR ST STATUTORY APPEAL BEFORE THE LD. CIT(A) AND LD. CIT(A) ALLOWED THE AP PEAL OF THE ASSESSEE. 5. NOW DEPARTMENTS APPEAL IS BEFORE US. 6. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. THE ISSUE OF ALLOWABILITY OF DEPRECIATION IN THE CA SE OF CHARITABLE TRUST HAS BEEN DECIDED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT ITA NO.1405/AHD /2016 DCIT VS. M/S. NIRMA UNIVERSITY ASST.YEAR 2009-10 - 3 - VS. SHETH MONILAL RANCHHUDDAS VISHRAM BHAVAN TRUST 198 ITR 598 (GUJ.) AND RELEVANT PORTION OF THE SAME ORDER IS RE PRODUCED AS UNDER: THE INCOME OF THE ASSESSEE-TRUST WAS MAINLY FROM I MMOVABLE PROPERTY. FOR THE ASSESSMENT YEARS 1971-72 AND 1972-73, THE A SSESSEE CLAIMED DEPRECIATION. THE ITO REJECTED THE ASSESSEES CLAIM ON THE GROUND THAT THE INCOME FROM HOUSE PROPERTY WAS TO DE CALCULATED ACCORDING TO SECTIONS TO 27, HOWEVER, ON APPEAL, THE AAC ALLOWED THE ASSESSEE'S CLAIM, APPEAL BY THE REVENUE, THE TRIBUNAL UPHELD T HE ORDER OF THE AAC, ON REFERENCE: IN THE CASE OF CIT V. RAO BAHADUR CALAVALA CUNNAN C HETTY CHARITIES [1982] 135 ITR 485. THE MADRAS HIGH COURT HELD THAT THE INCOME FROM PROPERTIES HELD UNDER TRUST WOULD HAVE TO BE ARRIVE D AT IN THE NORMAL COMMERCIAL MANNER WITHOUT CLASSIFICATION UNDER THE VARIOUS HEADS SET OUT IN SECTION 14. IT HELD THAT THE EXPRESSION 'INC OME' HAS TO HE UNDERSTOOD THE POPULAR OR GENERAL SENSE AND NOT IN THE SENSE IN WHICH THE INCOME ARRIVED AT FOR THE PURPOSE OF ASSESSMENT TO TAX BY APPLICATION OF SOME ARTIFICIAL PROVISIONS EITHER GI VING OR DENYING DEDUCTION. IT OBSERVED THAT THE COMPUTATION UNDER T HE DIFFERENT CATEGORIES OR HEADS ARISES ONLY FOR THE PURPOSE OF ASCERTAINING THE TOTAL INCOME FOR THE PURPOSES OF CHARGE. THAT PROVISIONS CANNOT BE INTRODUCED TO FIND OUT WHAT THE INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST TO BE EXCLUDED FROM THE TOTAL INCOME IS , FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER III. FOLLOWING THE AF ORESAID DECISION IN THE INSTANT CASE THE TRIBUNAL WAS JUSTIFIED IN HOLD ING THAT HAVING REGARD TO THE SCHEME OF THE ACT, 'INCOME' REFERRED TO IN S ECTION 11(1)(A) WAS NOT TO BE COMPUTED NOT IN ACCORDANCE WITH THE PROVISION S OF THE ACT BUT IN ACCORDANCE WITH THE NORMAL RULES OF THE ACCOUNTANCY UNDER WHICH THE DEPRECIATION HAS TO BE ALLOWED WHILE COMPUTING SUCH INCOME UNDER SECTION 11(1)(A). 7. LD. AR CITED AN ORDER OF CO-ORDINATE BENCH IN AS SESSEES OWN CASE IN ITA NO.1627/AHD/2015 FOR ASSESSMENT YEAR 2011-12 , SIMILAR CLAIM ITA NO.1405/AHD /2016 DCIT VS. M/S. NIRMA UNIVERSITY ASST.YEAR 2009-10 - 4 - WAS ALLOWED BY THE CO-ORDINATE BENCH WITH THE FOLLO WING PARA AND SAME IS REPRODUCED AS HEREUNDER: 4. LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY AR GUES IN FAVOUR OF THE IMPUGNED DISALLOWANCE. HIS CASE IS THAT THE ASS ESSING OFFICER HAD RIGHTLY HELD ASSESSEE'S CLAIM TO BE AN INSTANCE OF DOUBLE DEDUCTIONS. WE SOUGHT TO KNOW ABOUT THE FINALITY OF CIT(A)'S ORDER IN PRECEDING ASSESSMENT YEAR ON THE VERY ISSUE. THE ASSESSEE FIL ES BEFORE US COPY OF A CO-ORDINATE BENCH ORDER IN THIS REGARD DATED 29.01. 2015 REJECTING REVENUE'S IDENTICAL SUBSTANTIVE GROUND AS UNDER: '2. ASSESSEE TRUST IS A CHARITABLE TRUST REGISTERED WITH INCOME- TAX DEPARTMENT. ASSESSING OFFICER REJECTED THE CLAI M OF DEPRECIATION. HE RELIED ON DECISION OF HON'BLE SUPR EME COURT IN CASE OF ESCORTS LTD. VS. UNION OF INDIA (1993) 199 ITR 43 (SC). HOWEVER, FACTS OF ESCORTS LTD. ARE NOT APPLICABLE T O ASSESSEE. ESCORTS LTD IS NOT A CHARITABLE TRUST. IN VIEW OF A BOVE, CIT(A) ALLOWED DEPRECIATION. SAME HAS BEEN OPPOSED BEFORE US. IN THIS REGARD, LEARNED AUTHORIZED REPRESENTATIVE RELIED ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN TAX APPEAL NO. 933 OF 2010 WITH 934 TO 936 OF 2010 IN CASE OF DIRECTOR OF INCO ME TAX (EXEMPTION) VS. AHMEDABAD SOUTH INDIAN ASSOCIATION CHARITABLE TRUST, WHEREIN ASSESSING OFFICER DISALLOWED THE DEP RECIATION. MATTER TRAVELLED UP TO TRIBUNAL, WHEREIN FOLLOWING DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF COMMISSIONER OF INCOME- TAX VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST REPORTED IN (1992) 198 ITR 598 (GUJ.) DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. WE FIND THAT IN SHETH MANILAL R ANCHHODDAS VISHRAM BHAVAN TRUST (SUPRA) IN WHICH COURT HAD FOL LOWED EARLIER DECISION OF KARNATAKA AND MADHYA PRADESH HI GH COURTS IN CASE OF CIT VS. SOCIETY OF THE SISTERS OF ST. AN NE (1984) 146 ITR 28 (KAR.) AND CIT VS. RAIPUR PALLOTTINE SOCIETY (1989) 180 ITR 579 (MP) HAVE DECIDED THE ISSUE IN FAVOUR OF AS SESSEE BY OBSERVING AS UNDER: 'WHETHER DEPRECIATION HAS TO BE ALLOWED AS A NECESS ARY DEDUCTION FOR COMPUTING THE INCOME OF A CHARITABLE INSTITUTION WAS THE QUESTION WHICH CAME UP BEFORE T HE KARNATAKA HIGH COURT IN CIT V. SOCIETY OF THE SISTE RS OF ST. ANNE (1984) 146 ITR 28. NOTICING THE DIFFERENCE ITA NO.1405/AHD /2016 DCIT VS. M/S. NIRMA UNIVERSITY ASST.YEAR 2009-10 - 5 - BETWEEN THE WORD 'INCOME' AND THE EXPRESSION 'TOTAL INCOME' AND THE NECESSITY FOR PROVIDING DEPRECIATIO N IN ORDER TO MAINTAIN CORRECT ACCOUNTS, THE HIGH COURT HELD THAT THE AMOUNT OF DEPRECIATION DEBITED TO THE ACCO UNTS OF THE CHARITABLE INSTITUTION HAS TO BE DEDUCTED TO AR RIVE AT THE INCOME AVAILABLE FOR APPLICATION TO CHARITABLE AND RELIGIOUS PURPOSES. SAME VIEW HAS BEEN TAKEN BY THE MADHYA PRADESH HIGH COURT IN CIT V RAIPUR PALLOTTIN E SOCIETY (1989) 180 ITR 579. 'IN CIT V. RAO BAHADUR CALAVALA CUNNAN CHETTY CHANTIES (1982) 135 ITR 485, THE MADRAS HIGH COURT WAS REQUIRED TO CONSIDER WHET HER, FOR THE PURPOSE OF COMPUTING ACCUMULATION IN EXCESS OF 25 PER CENT AS LAID DOWN IN SECTION 11(1)(A) OF THE AC T, 'INCOME' HAS TO BE COMPUTED UNDER THE VARIOUS HEADS ENUMERATED IN THE INCOME-TAX ACT. IT HELD THAT THE INCOME FROM THE PROPERTIES HELD UNDER TRUST WOULD HAVE TO BE ARRIVED AT IN THE NORMAL COMMERCIAL MANNER WITHOUT CLASSIFICATION UNDER THE VARIOUS HEADS SET OUT IN S ECTION 14. IT HELD THAT THE EXPRESSION 'INCOME' HAS TO BE UNDERSTOOD IN THE POPULAR OR GENERAL SENSE AND NOT IN THE SENSE IN WHICH THE INCOME IS ARRIVED AT FOR THE PUR POSE OF ASSESSMENT TO TAX BY APPLICATION OF SOME ARTIFICIAL PROVISIONS EITHER GIVING OR DENYING DEDUCTION. IT O BSERVED THAT THE COMPUTATION UNDER THE DIFFERENT CATEGORIES OR HEADS ARISES ONLY FOR THE PURPOSES OF ASCERTAINING THE TOTAL INCOME FOR THE PURPOSES OF CHARGE. THOSE PROV ISIONS CANNOT BE INTRODUCED TO FIND OUT WHAT THE INCOME DE RIVED FROM THE PROPERTY HELD UNDER TRUST TO BE EXCLUDED F ROM THE TOTAL INCOME IS, FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER III. 'WE ARE IN RESPECTFUL AGREEMENT WITH THE VIEW TAKEN BY THE KARNATAKA, MADHYA PRADESH AND MADRAS HIGH COURTS. WE, THEREFORE, ANSWER BOTH THE QUESTIONS RE FERRED TO US IN THE AFFIRMATIVE AND AGAINST THE REVENUE. N O ORDER AS TO COSTS. ' FOLLOWING THE SAME HON'BLE GUJARAT HIGH COURT IN AH MEDABAD SOUTH INDIAN ASSOCIATION CHARITABLE TRUST (SUPRA) H AS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. THUS, THE ISSUE BE FORE US I.E. ITA NO.1405/AHD /2016 DCIT VS. M/S. NIRMA UNIVERSITY ASST.YEAR 2009-10 - 6 - ALLOWABILITY OF DEPRECIATION OF RS.6,47,32,014/- IS DECIDED IN FAVOUR OF ASSESSEE.' 5. COUPLED WITH THIS, IT IS BROUGHT TO OUR NOTICE T HAT THE LEGISLATURE HAS ALSO INSERTED AMENDMENT IN SECTION 11(6) OF THE ACT VIDE FINANCE ACT (NO.2) OF 2014 W.E.F. 01.04.2014 TO THE EFFECT THAT SUCH A CLAIM WOULD NOT BE ADMISSIBLE FROM PROSPECTIVE EFFECT ONL Y. LEARNED COUNSEL THEN QUOTES HON'BLE KARNATAKA HIGH COURT'S DECISION IN DIT(E) VS. AL- AMEEN CHARITABLE FUND TRUST HOLDING THE ABOVE AMEND MENT NOT TO BE HAVING RETROSPECTIVE EFFECT. WE REITERATE THAT WE A RE DEALING WITH ASSESSMENT YEAR 2011-12. WE THEREFORE TAKE INTO ACC OUNT THE ABOVE LEGAL AND FACTUAL POSITION TO AFFIRM THE CIT(A)'S F INDINGS UNDER CHALLENGE. 5. THIS REVENUE'S APPEAL IS DISMISSED. 8. HONBLE SUPREME COURT IN THE MATTER OF CIT-III, PUNE VS. RAJASTHAN AND GUJARAT CHARITABLE FOUNDATION PUNE IN CIVIL APPEAL NO.7186 OF 2014 GAVE SIMILAR KIND OF RELIEF TO THE ASSESSEE AND RELEVANT PARA OF THE HONBLE SUPREME COURT IS REPRODUCED HER E AS UNDER: THE FIRST QUESTION WHICH REQUIRES CONSIDERATION BY THIS COURT IS: WHETHER DEPRECIATION WAS ALLOWABLE ON THE ASSETS, T HE COST OF WHICH HAS BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER S ECTION 11 IN THE PAST YEARS? IN THE CASE OF CIT V. MUNISUVRAT JAIN 1994 T AX LAW REPORTER, 1084 THE FACTS WERE AS FOLLOWS. THE ASSESSEE WAS A CHARITABLE TRUST. IT WAS REGISTERED AS A PUBLIC CHARITABLE TRUST. IT WAS ALSO REGISTERED WITH THE COMMISSIONER OF INCOME TAX, PUNE. THE ASSESSEE DERIVED INCOME FROM THE TEMPLE PROPERTY WHICH WAS A TRUST PROPERTY . DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEARS 1977 -78, 1978-79 AND 1979-80, THE ASSESSEE CLAIMED DEPRECIATION ON THE V ALUE OF THE BUILDING @2% AND THEY ALSO CLAIMED DEPRECIATION ON FURNITUR E @ 5%. THE QUESTION WHICH AROSE BEFORE THE COURT FOR DETERMINA TION WAS : WHETHER DEPRECIATION COULD BE DENIED TO THE ASSESSEE, AS EX PENDITURE ON ACQUISITION OF THE ASSETS HAD BEEN TREATED AS APPLI CATION OF INCOME IN THE YEAR OF ACQUISITION? IT WAS HELD BY THE BOMBAY HIGH COURT THAT SECTION 11 OF THE INCOME TAX ACT MAKES PROVISION IN RESPECT OF COMPUTATION OF INCOME OF THE TRUST FROM THE PROPERT Y HELD FOR ITA NO.1405/AHD /2016 DCIT VS. M/S. NIRMA UNIVERSITY ASST.YEAR 2009-10 - 7 - CHARITABLE OR RELIGIOUS PURPOSES AND IT ALSO PROVID ES FOR APPLICATION AND ACCUMULATION OF INCOME. ON THE OTHER HAND, SECT ION 28 OF THE INCOME TAX ACT DEALS WITH CHARGEABILITY OF INCOME F ROM PROFITS AND GAINS OF BUSINESS AND SECTION 29 PROVIDES THAT INCO ME FROM PROFITS AND GAINS OF BUSINESS AHLL BE COMPUTED IN ACCORDANCE WI TH SECTION 30 TO SECTION 43C. THAT, SECTION 32(1) OF THE ACT PROVIDE S FOR DEPRECIATION IN RESPECT OF BUILDING, PLANT AND MACHINERY OWNED BY T HE ASSESSEE AND USED FOR BUSINESS PURPOSES. IT FURTHER PROVIDES FOR DEDUCTION SUBJECT TO SECTION 34. IN THAT MATTER ALSO, A SIMILAR ARGUMENT , AS IN THE PRESENT CASE, WAS ADVANCED ON BEHALF OF THE REVENUE, NAMELY , THAT DEPRECIATION CAN BE ALLOWED AS DEDUCTION ONLY UNDER SECTION 32 O F THE INCOME TAX ACT AND NOT UNDER GENERAL PRINCIPLES. THE COURT REJ ECTED THIS ARGUMENT. IT WAS HELD THAT NORMAL DEPRECIATION CAN BE CONSIDE RED AS A LEGITIMATE DEDUCTION IN COMPUTING THE REAL INCOME OF THE ASSES SEE ON GENERAL PRINCIPLES OR UNDER SECTION 11(1)(A) OF THE INCOME TAX ACT THE COURT REJECTED THE ARGUMENT ON BEHALF OF THE REVENUE THAT SECTION 32 OF THE INCOME TAX ACT WAS THE ONLY SECTION GRANTING BENEFI T OF DEDUCTION ON ACCOUNT OF DEPRECIATION. IT WAS HELD THAT INCOME OF A CHARITABLE TRUST DERIVED FORM BUILDING, PLANT AND MACHINERY AND FURN ITURE WAS LIABLE TO BE COMPUTED IN NORMAL COMMERCIAL MANNER ALTHOUGH TH E TRUST MAY NOT BE CARRYING ON ANY BUSINESS AND THE ASSETS IN RESPE CT WHEREOF DEPRECIATION IS CLAIMED MAY NOT BE BUSINESS ASSETS. IN ALL SUCH CASES, SECTION 32 OF THE INCOME TAX ACT PROVIDING FOR DEPR ECIATION FOR COMPUTATION OF INCOME DERIVED FROM BUSINESS OR PROF ESSION IS NOT APPLICABLE. HOWEVER, THE INCOME OF THE TRUST IS REQ UIRED TO BE COMPUTED UNDER SECTION 11 ON COMMERCIAL PRINCIPLES AFTER PRO VIDING FOR ALLOWANCE FOR NORMAL DEPRECIATION AND DEDUCTION THE REOF FROM GROSS INCOME OF THE TRUST. IN VIEW OF THE AFORESATATED JU DGMENT OF THE BOMBAY HIGH CURT, WE ANSWER QUESTION NO. 1 IN THE AFFIRMAT IVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 4. QUESTION NO. 2 HEREIN IS IDENTICAL TO THE QUESTI ON WHICH WAS RAISED BEFORE THE BOMBAY HIGH COURT IN THE CASE OF DIRECTO R OF INCOME-TAX (EXEMPTION) V. FRAMJEE CAWASJEE INSTITUTE [1993] 10 9 CTR 463. IN THAT CASE, THE FACTS WERE AS FOLLOWS: THE ASSESSEE WAS T HE TRUST. IT DERIVED ITS INCOME FROM DEPRECIABLE ASSETS. THE ASSESSEE TOOK I NTO ACCOUNT DEPRECIATION ON THOSE ASSETS IN COMPUTING THE INCOM E OF THE TRUST. THE ITO HELD THAT DEPRECIATION COULD NOT BE TAKEN INTO ACCOUNT BECAUSE, FULL CAPITAL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ITA NO.1405/AHD /2016 DCIT VS. M/S. NIRMA UNIVERSITY ASST.YEAR 2009-10 - 8 - ASSETS. THE ASSESSEE WENT IN APPEAL BEFORE THE ASSI STANT APPELLATE COMMISSIONER. THE APPEAL WAS REJECTED. THE TRIBUNAL , HOWEVER, TOOK THE VIEW THAT WHEN THE ITO STATED THAT FULL EXPENDI TURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS, W HAT HE REALLY MEANT WAS THAT THE AMOUNT 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 INCOME FROM THOSE ASSETS IN SUBSEQUENT YEARS, DEPRE CIATION IN RESPECT OF THOSE ASSETS CANNOT BE TAKEN INTO ACCOUNT. THIS VIE W OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE BOMBAY HIGH COURT IN THE ABOV E JUDGMENT. HENCE, QUESTION NO. 2 IS COVERED BY THE DECISION OF THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. CONSEQUENTLY, QUESTION NO. 2 IS ANSWERED IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. AFTER HEARING LEARNED COUNSEL FOR THE PARTIES, WE A RE OF THE OPINION THAT THE AFORESAID VIEW TAKEN BY THE BOMBAY HIGH COURT C ORRECTLY STATES THE PRINCIPLES OF LAW AND THERE IS NO NEED TO INTERFERE WITH THE SAME. IT MAY BE MENTIONED THAT MOST OF THE HIGH COURTS HA VE TAKEN THE AFORESAID VIEW WITH ONLY EXCEPTION THERETO BY THE H IGH COURT OF KERALA WHICH HAS TAKEN A CONTRARY VIEW IN LISSIE MEDICAL INSTITUTIONS V. COMMISSIONER OF INCOME TAX. IT MAY ALSO BE MENTIONED AT THIS STAGE THAT THE LEG ISLATURE, REALISING THAT THERE WAS NO SPECIFIC PROVISION IN THIS BEHALF IN T HE INCOME TAX ACT, HAS MADE AMENDMENT IN SECTION 11(6) OF THE ACT VIDE FIN ANCE ACT NO. 2/2014 WHICH BECAME EFFECTIVE FROM THE ASSESSMENT Y EAR 2015-2016. THE DELHI HIGH COURT HAS TAKEN THE VIEW AND RIGHTLY SO, THAT THE SAID AMENDMENT IS PROSPECTIVE IN NATURE. IT ALSO FOLLOWS THAT ONCE ASSESSEE IS ALLOWED DEPRE CIATION, HE SHALL BE ENTITLED TO CARRY FORWARD THE DEPRECIATION AS WELL. FOR THE AFORESAID REASONS, WE AFFIRM THE VIEW TAKEN BY THE HIGH COURT S IN THESE CASES AND DISMISS THESE MATTERS. ITA NO.1405/AHD /2016 DCIT VS. M/S. NIRMA UNIVERSITY ASST.YEAR 2009-10 - 9 - 9. RESPECTFULLY FOLLOWING THE AFORESAID ORDERS OF C O-ORDINATE BENCH, HONBLE GUJARAT HIGH COURT, HONBLE SUPREME COURT A ND APART FROM THE ABOVE SAID. IN OUR CONSIDERED OPINION LD.CIT(A) HAS PASSED REASONED AND DETAILED ORDER AND NOW MATER IS SQUARELY COVERED BY THE JUDGMENT OF HONBLE APEX COURT. THEREFORE, IN THESE CIRCUMSTANC ES, WE ARE NOT INCLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A). THEREFORE, WE DISMISS THE APPEAL OF THE DEPARTMENT. 10. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT I S DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27 / 02 /201 8 SD/- SD/- ( ) 4 5 ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/02/2018 PRITI YADAV, SR.PS !'# $#! # COPY OF THE ORDER FORWARDED TO : 1. !$' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 67- + 8- / CONCERNED CIT 4. + 8- 4!5 / THE CIT(A)-XIV, AHMEDABAD. 5. 9:;-67 !.!672 ! / DR, ITAT, AHMEDABAD 6. ;<=, # GUARD FILE. % & / BY ORDER, (9-- //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD