Asst.Director of Income Tax (Exemptions)-I, Hyderabad V. Kameneni. Education Society, Hyderabad

ITA 1585/HYD/2012

• Counselvise Citation: 158522514 RSA 2012
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 12-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-10-2012
• Court: TRIBUNAL
• Department Lawyers: E SUNIL BABU
• Assessee Lawyers: A V RAGHURAM
• Keywords: Depreciation; Charitable institution; Question of law; Cost of acquisition; Difference of opinion; Capital expenditure
• Section: 12A; 12AA; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NOS. 1585 & 1586/HYD/2012 ASSESSMENT YEARS: 2008-09 & 2009-10 ASST. DIRECTOR OF INCO ME TAX (EXEMPTIONS)-I, HYDERABAD VS KAMINENI EDUCATION AL SOCIETY, HYDERABAD [PAN: AAATK6305J] (APPELLANT) (RESPONDENT) FOR REVENUE : S HRI E. SUNIL BABU , DR FOR ASSESSEE : SHRI A.V. RAGHU RAM, AR DATE OF HEARING : 1 2 - 11 - 201 5 DATE OF PRO NOUNCEMENT : 18 - 1 1 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE TWO APPEALS ARE BY REVENUE AGAINST THE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, HYDERABAD, DATED 31-07-2012. THE ISSUE INVOLVED IN THIS APPEAL IS W HETHER ASSESSEE WOULD BE ELIGIBLE FOR DEPRECIATION ON THE ASSETS IN WHOSE RESPECT COST OF ACQUISITION HAS ALREADY BEEN CLAIMED AS APP LICATION OF INCOME? I.T.A. NOS. 1585 & 1586/HYD/2012 KAMINENI EDUCATIONAL SOCIETY :- 2 -: 2. AT THE OUTSET, BOTH THE PARTIES AGREED THAT THE ISSUE IS COVERED AGAINST THE REVENUE BY THE ORDERS OF THE CO -ORDINATE BENCH IN ITA NO. 939/HYD/2015 DT. 14-10-2015. 2.1. LD. DR HOWEVER, RELIED ON THE DECISION OF HON' BLE KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS . CIT [348 ITR 344 (KERALA)] TO SUPPORT THE REVENUES CONTENTIONS. 3. HAVING CONSIDERED THE RIVAL CONTENTIONS, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) IN ALLOWING THE CLAIM OF DEPRECIATION. THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR THE AY. 2010-11 IN ITA NO. 939/HYD/2015 DT. 14-10-2 015 HAS CONSIDERED THE ISSUE IN DETAIL AND HELD AS UNDER: 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. LEARNED R EPRESENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THE ISSUE INVOLVED IN THIS APPEAL OF THE ASSESSEE IS SQUARELY COVERED IN FAVOUR OF THE A SSESSEE BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF AP OLYMPIC ASSOCIATION, HYDERABAD FOR ASSESSMENT YEAR 2008-09 RENDERED VIDE ORDER DATED 7 FEBRUARY, 2014 IN ITA NO.1272/HYD/2013. A COPY OF THE SAID ORDER IS PLACE D ON RECORD BEFORE US AND A PERUSAL OF THE SAME SHOWS THAT A SI MILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSES SEE BY DISCUSSING ALL THE RELEVANT ASPECTS AS WELL AS THE RELEVANT CASE LAWS ON THE ISSUE ELABORATELY IN PARAS 7 TO 16, WHICH RE AD AS UNDER- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND E XAMINED THE ISSUE. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE IS REGISTERED UNDER SECTION 12AA OF THE I.T. ACT. THER E IS ALSO NO DISPUTE THAT ASSESSEE HAS SHOWN ALL THE RECEIPTS IN INCOME-EXPEN DITURE ACCOUNT AND CLAIMED VARIOUS EXPENSES IN ITS COMPUTATION OF INCO ME, WHILE DECLARING EXCESS OF INCOME OVER EXPENDITURE. IT IS ALSO NOT I N DISPUTE THAT INCOME OF THE ASSESSEE TRUST HAS TO BE COMPUTED WITH REFERENC E TO THE PROVISIONS OF SECTION 11 AND 13. THEREFORE, THE PRINCIPLES GOVERN ING COMPUTATION OF INCOME UNDER THE HEAD BUSINESS MAY NOT APPLY TO THE COMPUTATION OF INCOME UNDER THE ABOVE PROVISIONS, SINCE THE INCOME OF A CHARITABLE INSTITUTION HAS TO BE COMPUTED UNDER ORDINARY PRINC IPLES OF COMMERCIAL ACCOUNTING, AND DEPRECIATION HAS TO BE ALLOWED ON D EPRECIABLE ASSETS HELD BY A CHARITABLE INSTITUTION TO ARRIVE AT THE I NCOME OF 75% (NOW 85%) WHICH IS REQUIRED TO BE APPLIED FOR CHARITABLE PURP OSE. IN THE DECISION OF I.T.A. NOS. 1585 & 1586/HYD/2012 KAMINENI EDUCATIONAL SOCIETY :- 3 -: THE HONBLE SUPREME COURT IN THE CASE OF ESCORTS LT D. (SUPRA), THE HONBLE SUPREME COURT WAS TO CONSIDER THE ISSUE WHE REIN THE DEPRECIATION WAS ALSO CLAIMED ON AN ASSET WHICH WAS CLAIMED AS A DEDUCTION WHILE USING FOR RESEARCH, AS CAPITAL EXP ENDITURE ON SCIENTIFIC RESEARCH. ON THOSE FACTS, THE HONBLE SUPREME COUR T HELD THAT DEPRECIATION WAS INADMISSIBLE SINCE THE ENTIRE COST OF THE ASSET USED FOR RESEARCH WAS CLAIMED AS DEDUCTION. HOWEVER, THE SAM E PRINCIPLE MAY NOT APPLY TO THE COMPUTATION OF INCOME UNDER SECTION 11 OF THE TRUST. 8. THE HONBLE KERALA HIGH COURT IN THE CASE OF LI SSIE MEDICAL INSTITUTIONS VS. CIT (2012) 348 ITR 344 (KERALA), T AKING INTO CONSIDERATION OF CLARIFICATION ISSUED BY THE CBDT I GNORING ITS OWN CIRCULAR 5-P (LXX-6) OF 1968 DATED 19.06.1968, OPIN ED THAT THERE COULD BE LEAKAGE OF REVENUE AND GENERATION OF BLACK MONEY , IF DEPRECIATION WAS ALLOWED. THUS, THE HONBLE KERALA HIGH COURT GAVE D ECISION IN FAVOUR OF REVENUE AND DIRECTED THE ASSESSEE TO REDRAW THE ACC OUNTS. 9. THE DECISION OF THE COORDINATE BENCH, WHICH THE LEARNED CIT(A) RELIED ON, I.E., IN THE CASE OF SRI VENKATA SAI EDUCATIONAL SOCIETY (SUPRA), HOWEVER, DID NOT DECIDE THE ISSUE BUT REST ORED THE MATTER TO THE FILE OF THE A.O. TO EXAMINE; WHETHER ASSETS HAVE BE EN CLAIMED AS EXEMPTION IN EARLIER YEARS ON WHICH DEPRECIATION WA S CLAIMED. HOWEVER, IN A LATER ORDER BY THE COORDINATE BENCH OF ITAT, H YDERABAD IN THE CASE OF ADIT (EXEMPTION)-I VS. ROYAL EDUCATIONAL SOCIETY IN ITA.NO. 1378/HYD/2011 DATED 28.06.2012 HOWEVER, ALLOWED THE CLAIM OF DEPRECIATION AND DISMISSED THE REVENUES APPEAL. TH E COORDINATE BENCH RELIED ON THE DECISION OF HONBLE PUNJAB AND HARYAN A HIGH COURT IN THE CASE OF CIT VS. MANAV MANGAL SOCIETY 328 ITR 421 (P &H) (HC) AND CIT VS. MARKET COMMITTEE, PIPLI (2011) 330 ITR 16, IN A RRIVING AT THAT DECISION. THUS, THERE WAS A DIFFERENCE OF OPINION O N THE ABOVE ISSUE AT THAT POINT OF TIME. 10. THE HONBLE PUNJAB AND HARYANA HIGH COURT IN T HE CASE OF CIT VS. MANAV MANGAL SOCIETY 328 ITR 421 (P&H) (HC) HAS CONSIDERED AND ALLOWED THE CLAIM OF DEPRECIATION. THE AMOUNT SPENT ON CONSTRUCTION OF SCHOOL BUILDIN G AT PANCHKULA IS A CAPITAL EXPENDITURE BUT FOR THE PURP OSE OF SECTION 11 IT IS AN OUTGOING EXPENDITURE WHICH IS APPLICATION OF INCOME OF THE APPELLANT TRUST FOR CHARITABLE PURPOSE. THE APPELLA NT SHALL ALSO BE ENTITLED TO CLAIM DEPRECIATION ON THE SCHOOL BUILDI NG. 11. THIS DECISION WAS FOLLOWED IN THE CASE OF CIT VS. TINY TOTS EDUCATION SOCIETY (2011) 330 ITR 21 BY THE HONBLE PUNJAB & HARYANA HIGH COURT. 12. THIS ISSUE HAS ELABORATELY BEEN DISCUSSED BY T HE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. VISHWA JAGR ITI MISSION IN ITA.NO. I.T.A. NOS. 1585 & 1586/HYD/2012 KAMINENI EDUCATIONAL SOCIETY :- 4 -: 140/2012 DATED 29.03.2012 AND TOOK A OVER VIEW OF T HE EXISTING DECISIONS ON THE ISSUE WHILE HOLDING AS UNDER : 11. THE REVENUE IS IN APPEAL AGAINST THE AFORESAID ORDER OF THE TRIBUNAL. WE ARE NOT INCLINED TO ADMIT THE APPE AL AND FRAME ANY SUBSTANTIAL QUESTION OF LAW SINCE NONE ARISES F ROM THE ORDER OF THE TRIBUNAL. THERE IS NO DISPUTE THAT THE ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA VIDE ORDER DATED 11 TH SEPTEMBER, 2009 AND, THEREFORE, IT WAS ENTITLED TO EXEMPTION O F ITS INCOME UNDER SECTION 11. THE ONLY QUESTION IS WHETHER THE INCOME OF THE ASSESSEE SHOULD BE COMPUTED ON COMMERCIAL PRINCIPLES AND IN DOING SO WHETHER DEPRECIATION ON FIXED ASSETS UTILISED FOR T HE CHARITABLE PURPOSES SHOULD BE ALLOWED. ON THIS ISSUE, THERE SE EMS TO BE A CONSENSUS OF JUDICIAL THINKING AS IS SEEN FROM THE AUTHORITIES RELIED UPON BY THE CIT(APPEALS) AS WELL AS THE TRIBUNAL. I N CIT VS. THE SOCIETY OF THE SISTERS OF ST. ANME (SUPRA), AN IDENTICAL QUESTION AROSE BEFORE THE KARNATAKA HIRR COURT. THE RE THE SOCIETY WAS RUNNING A SCHOOL IN BANGALORE AND WAS ALLOWED E XEMPTION UNDER SECTION 11. THE QUESTION AROSE AS TO HOW THE INCOME AVAILABLE FOR APPLICATION TO CHARITABLE AND RELIGIOUS PURPOSE S SHOULD BE COMPUTED. JAGANNATHA SETTY, J. SPEAKING FOR THE DI VISION BENCH OF THE COURT HELD THAT INCOME DERIVED FROM PROPERTY HELD UNDER TRUST CANNOT BE THE 'TOTAL INCOME' AS DEFINED IN SECTION 2(45) OF THE ACT AND THAT THE WORD 'INCOME' IS A WIDER TERM THAN THE EXPRESSION 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'. REFE RENCE WAS MADE TO THE NATURE OF DEPRECIATION AND IT WAS POINTED OU T THAT DEPRECIATION WAS NOTHING BUT DECREASE IN THE VALUE OF PROPERTY THROUGH WEAR, DETERIORATION OR OBSOLESCENCE. IT WAS OBSERVED THAT DEPRECIATION, IF NOT ALLOWED AS A NECESSARY DEDUCTI ON FOR COMPUTING THE INCOME OF CHARITABLE INSTITUTIONS, THEN THERE I S NO WAY TO PRESERVE THE CORPUS OF THE TRUST FOR DERIVING THE INCOME. TH E CIRCULAR NO.5-P (LXX-6) OF 1968, DATED JULY 19,1968 WAS REPRODUCED IN THE JUDGMENT IN WHICH THE BOARD HAS TAKEN THE VIEW THAT THE INCOME OF THE TRUST SHOULD BE UNDERSTOOD IN ITS COMMERCIAL SE NSE. THE CIRCULAR IS AS UNDER:- 'WHERE THE TRUST DERIVES INCOME FROM HOUSE PROPERTY, INTEREST ON SECURITIES, CAPITAL GAINS, OR OTHER SOURCES, THE WORD 'INCOME' SHOULD BE UNDERSTOOD IN ITS COMMERCIAL SENSE, I.E., BOOK INCOME, AFTER ADDING B ACK ANY APPROPRIATIONS OR APPLICATIONS THEREOF TOWARDS THE PURPOSE OF THE TRUST OR OTHERWISE, AND ALSO AFTER A DDING BACK ANY DEBITS MADE FOR CAPITAL EXPENDITURE INCURR ED FOR THE PURPOSES OF THE TRUST OR OTHERWISE. IT SHOU LD BE NOTED, IN THIS CONNECTION, THAT THE AMOUNTS SO ADDE D BACK WILL BECOME CHARGEABLE TO TAX U/S. 11(3) TO TH E EXTENT THAT THEY REPRESENT OUTGOINGS FOR PURPOSES O THER I.T.A. NOS. 1585 & 1586/HYD/2012 KAMINENI EDUCATIONAL SOCIETY :- 5 -: THAN THOSE OF THE TRUST. THE AMOUNTS SPENT OR APPLI ED FOR THE PURPOSES OF THE TRUST FROM OUT OF THE INCOM E COMPUTED IN THE AFORESAID MANNER, SHOULD BE NOT LES S THAN 75 PER CENT. OF THE LATTER, IF THE TRUST IS T O GET THE FULL BENEFIT OF THE EXEMPTION U/S. 11(1).' 12. A SIMILAR VIEW WAS EARLIER EXPRESSED BY THE AND HRA PRADESH HIGH COURT IN COMMISSIONER OF INCOME-TAX. V. NIZAM' S SUPPL. RELIGIOUS ENDOWMENT TRUST (1981) 127 ITR 378 AND BY THE MADRA S HIGH COURT IN COMMISSIONER OF INCOME-TAX VS RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES (1982) 135 ITR 485. THE MADHYA PRADESH HI GH COURT IN CIT VS. RAIPUR PALLOTTINE SOCIETY (SUPRA) HAS HELD, FOL LOWING THE JUDGMENT OF THE KARNATAKA HIGH COURT CITED ABOVE, THAT IN COMPU TING THE INCOME OF A CHARITABLE INSTITUTION/TRUST, DEPRECIATION OF ASSET S OWNED BY THE TRUST/INSTITUTION IS A NECESSARY DEDUCTION ON COMME RCIAL PRINCIPLES. THE GUJARAT HIGH COURT, AFTER REFERRING TO THE JUDGMENT S OF THE KARNATAKA, MAHARASHTRA AND MADHYA PRADESH HIGH COURTS CITED AB OVE, ALSO CAME TO THE SAME CONCLUSION AND HELD THAT THE AMOUNT OF DEP RECIATION DEBITED TO THE ACCOUNTS OF THE CHARITABLE INSTITUTION HAS TO B E DEDUCTED TO ARRIVE AT THE INCOME AVAILABLE FOR APPLICATION TO CHARITABLE AND RELIGIOUS PURPOSES. 13. THE JUDGMENT OF THE SUPREME COURT IN ESCORTS LI MITED VS. UNION OF INDIA (SUPRA) HAS BEEN RIGHTLY HELD TO BE INAPPLICABLE TO THE PRESENT CASE. THERE ARE TWO REASONS AS TO WHY THE J UDGMENT CANNOT BE APPLIED TO THE PRESENT CASE. FIRSTLY, THE SUPREME C OURT WAS NOT CONCERNED WITH THE CASE OF A CHARITABLE TRUST/INSTITUTION INV OLVING THE QUESTION AS TO WHETHER ITS INCOME SHOULD BE COMPUTED ON COMMERCIAL PRINCIPLES IN ORDER TO DETERMINE THE AMOUNT OF INCOME AVAILABLE FOR APP LICATION TO CHARITABLE PURPOSES. IT WAS A CASE WHERE THE ASSESSEE WAS CARR YING ON BUSINESS AND THE STATUTORY COMPUTATION PROVISIONS OF CHAPTER IV- D OF THE ACT WERE APPLICABLE. IN THE PRESENT CASE, WE ARE NOT CONCERN ED WITH THE APPLICABILITY OF THESE PROVISIONS. WE ARE CONCERNED ONLY WITH THE CONCEPT OF COMMERCIAL INCOME AS UNDERSTOOD FROM THE ACCOUNT ING POINT OF VIEW. EVEN UNDER NORMAL COMMERCIAL ACCOUNTING PRINCIPLES, THERE IS AUTHORITY FOR THE PROPOSITION THAT DEPRECIATION IS A NECESSAR Y CHARGE IN COMPUTING THE NET INCOME. SECONDLY, THE SUPREME COURT WAS CON CERNED WITH THE CASE WHERE THE ASSESSEE HAD CLAIMED DEDUCTION OF THE COS T OF THE ASSET UNDER SECTION 35(1) OF THE ACT, WHICH ALLOWED DEDUCTION F OR CAPITAL EXPENDITURE INCURRED ON SCIENTIFIC RESEARCH. THE QUESTION WAS W HETHER AFTER CLAIMING DEDUCTION IN RESPECT OF THE COST OF THE ASSET UNDER SECTION 35(1), CAN THE ASSESSEE AGAIN CLAIM DEDUCTION ON ACCOUNT OF DEPREC IATION IN RESPECT OF THE SAME ASSET. THE SUPREME COURT RULED THAT, UNDER GENERAL PRINCIPLES OF TAXATION, DOUBLE DEDUCTION IN REGARD TO THE SAME BU SINESS OUTGOING IS NOT INTENDED UNLESS CLEARLY EXPRESSED. THE PRESENT CASE IS NOT ONE OF THIS TYPE, AS RIGHTLY DISTINGUISHED BY THE CIT(APPEALS). 14. HAVING REGARD TO THE CONSENSUS OF JUDICIAL OPIN ION ON THE PRECISE QUESTION THAT HAS ARISEN IN THE PRESENT APP EAL, WE ARE NOT INCLINED TO ADMIT THE APPEAL AND FRAME ANY SUBSTANTIAL QUEST ION OF LAW. THERE DOES I.T.A. NOS. 1585 & 1586/HYD/2012 KAMINENI EDUCATIONAL SOCIETY :- 6 -: NOT APPEAR TO BE ANY CONTRARY VIEW PLAUSIBLE ON THE QUESTION RAISED BEFORE US AND AT ANY RATE NO JUDGMENT TAKING A CONT RARY VIEW HAS BEEN BROUGHT TO OUR NOTICE. IN THE CIRCUMSTANCES, WE DEC LINE TO ADMIT THE PRESENT APPEAL AND DISMISS THE SAME WITH NO ORDER A S TO COSTS. 13. SIMILAR VIEW WAS ALSO TAKEN BY THE COORDINATE BENCH OF THE ITAT, BANGALORE IN THE CASE OF ACIT VS. ADICHUN CHANAGIRI SHIKSHANA TRUST (2013) 31 TAXMANN.COM 157 (BANGALOR E TRIB.) WHEREIN IT WAS HELD THAT CHARITABLE OR RELIGIOUS TR UST REGISTERED UNDER SECTION 12A CAN CLAIM BENEFIT UNDER SECTION 1 1 IN THE FORM OF APPLICATION OF FUNDS AS WELL AS DEPRECIATION UNDER SECTION 32 IN RESPECT OF PROPERTY HELD UNDER THE TRUST. THE SAME OPINION WAS FOLLOWED BY THE ITAT, BANGALORE TRIBUNAL IN THE CAS E OF DDIT(E), BANGALORE VS. CUTCHI MEMON UNION (2013) 38 TAXMAN.C OM 276 (BANGALORE-TRIB.) WHEREIN ALSO SIMILAR OPINION WAS EXPRESSED. 14. THUS, ON THIS ISSUE, THERE ARE DECISIONS OF HO NBLE GUJARAT HIGH COURT, MADHYA PRADESH HIGH COURT, KERA LA HIGH COURT, BOMBAY HIGH COURT, PUNJAB AND HARYANA HIGH C OURT AND DELHI HIGH COURT IN FAVOUR OF THE ASSESSEE, WHEREAS , THERE IS ONLY A LONE JUDGMENT OF HONBLE KERALA HIGH COURT AGAINST THE ABOVE OPINION CONFIRMING THE REVENUES CONTENTION. IN VIE W OF THE MAJORITY OPINION OF VARIOUS HIGH COURTS, WE ARE OF THE OPINI ON THAT AMOUNT OF DEPRECIATION DEBITED TO THE ACCOUNT OF CHARITABLE I NSTITUTION HAS TO BE ALLOWED IN ORDER TO ARRIVE AT THE INCOME AVAILABLE FOR APPLICATION TO THE CHARITABLE PURPOSE. 15. SINCE THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. VISHWA JAGRUTI MISSION (SUPRA) HAS DISTINGUISHED VA RIOUS JUDGMENTS ON THE ISSUE, WE DO NOT INTEND TO DISCUSS THE SAME AGAIN. HOWEVER, WE RESPECTFULLY AGREE WITH THE PRIN CIPLES LAID DOWN BY THE HONBLE DELHI HIGH COURT, WHICH WERE IN FAVO UR OF THE ASSESSEE ALLOWING THE CLAIM OF DEPRECIATION. 16. THIS ISSUE CAN ALSO BE LOOKED INTO IN ANOTHER MANNER. NOT ONLY THE BOARD CIRCULAR 5-P (LXX-6) OF 1968 DATED 1 9.06.1968 BUT ALSO THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDI A HAS GIVEN GUIDELINES ABOUT THE CLAIM OF DEPRECIATION. EVEN, A S SEEN FROM THE DECISION OF THE KERALA HIGH COURT IN THE CASE OF LI SSIE MEDICAL INSTITUTIONS VS. CIT (2012) 348 ITR 344 (KERALA), T HERE THE ASSESSEE WAS HAVING ACTIVITY OF RUNNING HOSPITAL AND THE ISS UE AROSE, WHILE CLAIMING DEPRECIATION ON THE ASSETS WHILE COMPUTING THE INCOME. THE HOSPITAL WAS RUN BY THE TRUST. HOWEVER, IN THE PRES ENT CASE, THERE IS NO SUCH BUSINESS ACTIVITY. AS SEEN FROM THE COMPUTA TION OF INCOME PLACED ON RECORD, ASSESSEE HAS NOT CLAIMED ANY APPL ICATION OF INCOME TOWARDS PURCHASE OF ASSETS IN THIS YEAR. A. O. HAS NOT BROUGHT OUT ANYTHING ON RECORD THAT ASSETS PURCHASE D BY ASSESSEE HAVE BEEN CLAIMED AS DEDUCTION IN EARLIER YEARS AND WITHOUT EXAMINING THE ISSUE A.O. CANNOT DISALLOW THE AMOUNT , SIMPLY I.T.A. NOS. 1585 & 1586/HYD/2012 KAMINENI EDUCATIONAL SOCIETY :- 7 -: BECAUSE THERE WAS A CASE LAW ESTABLISHING THE PRINC IPLE THAT DOUBLE DEDUCTION IS NOT ALLOWABLE. 4. THE OBJECTION RAISED BY LD. DR WAS ALREADY CON SIDERED BY THE COORDINATE BENCH ABOVE. AS THE ISSUE INVOLVED IN TH E PRESENT CASE AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CASE OF AP OLYMPIC ASSOCIATION, HYDERABAD FOR AY. 2 008-09 IN ITA NO.1272/HYD/2013 DT. 7 FEBRUARY, 2014, (SUPRA), WE RESPECTFULLY FOLLOW THE DECISION RENDERED BY THE CO-ORDINATE BEN CH OF THIS TRIBUNAL IN THE SAID CASE, AND DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF ASSESSEE FOR DEPRECIATION IN RESPECT O F THE ASSETS, THE COST OF WHICH WAS CLAIMED BY THE ASSESSEE AS APPLIC ATION OF INCOME. 5. IN THE RESULT, BOTH APPEALS OF REVENUE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER, 2015 SD/- SD/- (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEM BER HYDERABAD, DATED 18 TH NOVEMBER, 2015 TNMM I.T.A. NOS. 1585 & 1586/HYD/2012 KAMINENI EDUCATIONAL SOCIETY :- 8 -: COPY TO : 1. ASST. DIRECTOR OF INCOME TAX (EXEMPTIONS)-1, 3 RD FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. KAMINENI EDUCATIONAL SOCIETY, 5-9-261/3, KING KO TI ROAD, HYDERABAD. 3 . CIT (APPEALS) - IV , HYDERABAD. 4. THE DIRECTOR OF INCOME TAX (EXEMPTIONS) , HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.