DCIT (EXEMPTIONS) CHENNAI CIRCLE, CHENNAI V. M/S EDUCATIONAL TRUST OF SEVENTH DAY ADVENTISTS, CHENNAI

ITA 1589/CHNY/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2209 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R M NARAYANAN
• Keywords: Capital asset; Depreciation; Charitable institution; Earning of tax free income; Bad and doubtful debts; Capital expenditure; Set aside; CHAPTER IV
• Section: 143(3); 43; 13; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , . , % BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NOS.1589 & 1590/CHNY/2018 ( / ASSESSMENT YEARS: 2010-11 & 2012-13) DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHENNAI CIRCLE AAYAKAR BHAVAN ANNEX, 3 RD FLOOR CHENNAI-600 034. VS M/S. EDUCATIONAL TRUST OF SEVENTH DAY ADVENTISTS AAA 148, THIRD AVENUE ANNA NAGAR WEST. CHENNAI-600 040. PAN: AAATE 0547Q ( /APPELLANT) /RESPONDENT/ / APPELLANT BY : MR. SURESH PERIASAMY, JCIT /RESPONDENTBY : MR.R.M.NARAYANAN, FCA /DATE OF HEARING : 04.02.2021 /DATE OF PRONOUNCEMENT : 03.03.2021 / O R D E R PER G.MANJUNATHA, AM: THESE TWO APPEALS FILED BY REVENUE ARE DIRECTED AG AINST COMMON ORDER OF LEARNED CIT(A)-17, CHENNAI DATED 01.02.2018 AND PERTAIN TO ASSESSMENT YEARS 2010-11 AND 2012-13. SINCE, FACTS ARE IDENTICAL AND ISSUES AR E COMMON, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORDER. 2. THE REVENUE HAS MORE OR LESS FILED COMMON GROUN DS OF APPEAL FOR BOTH ASSESSMENT YEARS, THEREFORE, FOR T HE SAKE OF 2 ITA NOS. 1589 & 1590/CHNY/2018 BREVITY, GROUNDS OF APPEAL FILED IN ITA NO.1589/CHN Y/2018 FOR ASSESSMENT YEAR 2010-11 ARE REPRODUCED AS UNDER:- 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRAR Y TO THE LAW AND FACTS OF THE CASE. 2.1 THE ID. CIT (A) ERRED IN HOLDING THAT THE AS SESSEE IS ELIGIBLE TO SET OFF OF BROUGHT FORWARD EXCESS APPLICATION OF FUNDS TO SUBSEQUENT YEARS. 2.2 THE ID. CIT (A) ERRED IN HOLDING THAT THE AS SESSEE IS ELIGIBLE TO CARRY FORWARD THE SAME AND SET OFF AGAINST THE S HORTFALL IN THE SUBSEQUENT YEARS. 2.3 THE ID. CIT (A) FAILED TO OBSERVE THAT THERE IS NO PROVISION IN THE INCOME TAX ACT IN RESPECT OF TRUSTS WHICH ALLOW S FOR DETERMINATION OF LOSS U/S. 11 AND CARRY FORWARD THE SAME TO SUBSEQUENT YEAR TO BE SET OFT AGAINST INCOME OF THE SUBSEQUENT YEAR. 2.4 THE ID. CIT (A) FAILED TO OBSERVE THAT THE SE TTING OFF A AGAINST THE SPIRIT OF THE PROVISIONS OF SECTION 11 AND SECTION 12 AND THE INTENTION OF THE LEGISLATURE. 2.5 THE CIT(A) FAILED TO CONSIDER THE DECISIONS IN THE CASES OF RAMJID RAS VS.C1T (1965) 58 ITR 181 AII) AND PUSHPA WAWATI SINGHANIA RESEARCH INSTITUTE OF LIVER RENAL & DIGES TIVE DISEASES VS. DY.DIT (2009)29 SOPT 316( DEL) 2.6 THE LD.CIT(A) FAILED TO OBSERVE THAT THE IF THERE WAS EXCESS EXPENDITURE IT WAS DELIBERATE AND COULD NOT BE CARR IED FORWARD BEING RELATED TO EARLIER YEARS INCOME. 2.7 THE LD.CIT(A) FAILED TO OBSERVE THAT THE EX CESS APPLICATION OF FUNDS IN EARLIER YEAR AMOUNTED TO DOUBLE BENEFIT ONE BEING EXEMPT INCOME AND THE OTHER BEING CARRY FORWARD OF LOSS. 2.8 THE LD CLT(A) HAS FAILED TO NOTE THAT THE DEC ISION OF THE HONBLE ITAT A BENCH IN THE CASE OF ANJUNIAN-E-HIM AYATH-LSLAM VS.ADIT(EXEMPTION) CHENNAI FOR THE A.Y. 2009-10 RE PORTED IN (2015) 59 TAXMANN.COM 379(CHENNAI-TRIB) WAS IN FAVO UR OF THE DEPARTMENT. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUC ED AT THE TIME OF HEARING, IT L PRAYED THAT THE ORDER OF THE LEARNED 3 ITA NOS. 1589 & 1590/CHNY/2018 CLT(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSES SING OFFICER MAY BE RESTORED. 3. BRIEF FACTS ARE THAT ASSESSEE IS A TRUST REGIST ERED U/S.12AA OF THE ACT FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 ON 29.09.2010 ADMITTING NIL TOTAL INCO ME AFTER CLAIMING EXEMPTION U/S. 11 OF THE ACT. THE CASE W AS TAKEN UP FOR SCRUTINY AND ASSESSMENT HAS BEEN COMPLETED U/ S. 143(3) OF THE ACT ON 25.03.2013 BY MAKING ADDITIONS TOWARD S DISALLOWANCE OF DEPRECIATION ON FIXED ASSETS ON TH E GROUND THAT WHEN ASSESSEE HAS CLAIMED PURCHASE / ACQUISITION O F CAPITAL ASSET AS APPLICATION OF INCOME U/S.11 OF THE ACT, THEN FURTHER DEDUCTION OF DEPRECIATION ON SAID ASSETS AMOUNTS T O DOUBLE DEDUCTION AND HENCE, SAME CANNOT BE ALLOWED AS DED UCTION. TO SUPPORT HIS STAND, THE ASSESSING OFFICER HAS R ELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F M/S.ESCORTS LTD. VS. UOI., 199 ITR 43 . FURTHER, T HE ASSESSING OFFICER HAS DISALLOWED RETIREMENT FUND, GRATUITY F UND, INVENTORIES WRITTEN OFF, BAD DEBTS WRITTEN OFF, EMP LOYEES MEDICAL INSURANCE & GLOBAL BASIC LIFE INSURANCE ON THE GR OUND THAT ABOVE PAYMENTS ARE NON-FUNDED LIABILITY, BUT THERE IS NO ACTUAL 4 ITA NOS. 1589 & 1590/CHNY/2018 OUTFLOW OF CASH AND HENCE, SAME CANNOT BE CONSIDERE D AS APPLICATION OF INCOME U/S.11 OF THE ACT. SIMILARL Y, THE ASSESSING OFFICER HAS DENIED CARRY FORWARD OF EX CESS APPLICATION OF INCOME FOR CHARITABLE PURPOSES TO BE ADJUSTED AGAINST INCOME OF TRUST IN SUBSEQUENT YEARS, ON TH E GROUND THAT THERE IS NO PROVISION TO CARRY FORWARD EXCESS APP LICATION OF INCOME TO SUBSEQUENT YEARS. 4. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE AS UNDER:- 4. THE ASSESSEES JUSTIFICATION FOR THE CLAI M OF DEPRECIATION WAS EXAMINED. AS FAR AS THE ASSESSMENTS OF CHARITAB LE ORGANIZATIONS ARE CONCERNED THERE ARE TWO SETS OF P ROVSIONS PROVIDED II THE I T ACT, FIRSTLY, THE ASSESSEES EL IGIBILITY FOR EXEMPTION OF ITS INCOME U/S. 11 TO 13 OF THE I T AC T. IF THE ASSESSEE IS FOUND TO BE ELIGIBLE FOR EXEMPTION OF I TS INCOME U/S. 11 OF THE I T ACT, THEN THE ASSESSEES INCOME AND I TS APPLICATION ALONE HAVE TO BE EXAMINED IRRESPECTIVE OF THE OTHER PROVISIONS CONTAINED IN OTHER SECTIONS OF THE ACT, ESPECIALLY THE SECTIONS PROVIDED FROM 14 TO 8OVVA OF THE ACT (I.E. CHAPTER IV TO VI B). IF THE CONDITIONS PROVIDED ULS.11 TO 13 OR U/S.L0(2 3C) ARE NOT FULFILLED, THEN THE PROVISIONS OF CHAPTER IV TO VIB WILL GET ATTRACTED AND HE INCOME HAS TO BE COMPUTED ACCORDIN G TO THE SAID PROVISIONS. THUS, WHILE COMPUTING THE INCOME OF THE TRUST AND ITS APPLICATION TO THE EXTENT OF 35% OF SUCH INCOME, AN Y DEDUCTIONS 5 ITA NOS. 1589 & 1590/CHNY/2018 /ALLOWANCES PROVIDED FROM SEC. 14 TO 80 VVA SHOULD NOT BE CONSIDERED. FURTHER, AS PER SECTION 11 OF THE I T A CT, EVEN THE CAPITAL EXPENDITURE WILL ALSO AMOUNT TO APPLICATION OF THE INCOME OF THE TRUST AND ACCORDINGLY, SUCH CAPITAL EXPENDIT URE WILL BE TREATED AS APPLICATION IN ITS ENTIRETY AND THEREFOR E ANY FURTHER ALLOWANCE BY WAY OF DEPRECIATION OR OTHERWISE WILL AMOUNT TO EXTRA DEDUCTION OR DOUBLE DEDUCTION WHICH IS NOT PE RMITTED IN THE I T ACT. PROVISION OF DEPRECIATION U/S.32 OF TH E I T ACT IS A SPECIALLY PERMITTED ALLOWANCE WHITE COMPUTING THE I NCOME UNDER THE HEAD BUSINESS OR PROFESSION, BECAUSE IN SUCH A SITUATION THE CAPITAL EXPENDITURE CANNOT BE ALLOWED AS A DEDUCTION. UNDER THE PROVISIONS OF SECTION 11 OF TH E IT ACT, ONLY THE ACTUAL EXPENDITURE IS CONSIDERED AS APPLICATION . NO NOTIONAL EXPENDITURE OR ALLOWANCES ARE PERMITTED TO BE COUNT ED AS APPLICATION OF INCOME OF THE TRUST. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF E SCORTS LTD VS UNION OF INDIA (199 ITR 43) ALSO HELD THAT THE A SSESSEE SHOULD NOT BE ALLOWED TO CLAIM TWO DEDUCTIONS ON TH E CAPITAL EXPENDITURE ON SCIENTIFIC RESEARCH, I E. BOTH UNDER SECTION 10(2)(VI) AND SECTION 10(2)(XIV) UNDER 1922 ACT OR UNDER SECTIONS 32(1)(II) AND 35(2)(IV) OF 1961 ACT. EVEN IN THE CASE OF CLT VS. RAO BAHADUR CALAVALA CU ANAN CHETTY CTRARITTES (135 ITR 485), THE HONBE HIGH COU RT OF MADRAS CIEARLY HELD THAT WHILE COMPUTING THE INCOME OF THE TRUST U/S. 11 FOR THE PURPOSES OF APPLICATION OF IN COME, THE WORD INCOMES HAS TO BE UNDERSTOOD IN NORMAL PARLANCE WIT HOUT LOOKING INTO OR INVOKING THE PROVISIONS OF SEC. 14 OF THE IT ACT. THE COURT ALSO HELD THAT ALL THE OUT GOINGS ARE TO BE CONSIDERED 6 ITA NOS. 1589 & 1590/CHNY/2018 WHILE DETERMINING HE INCOME OF THE TRUST U/S.11 OF THE ACT. THE RELEVANT EXTRACT OF THE JUDGMENT IS UNDER: THE PROVISION OF SECTION 14 USES TWO EXPRESSIONS (1 ) TOTAL INCOME AND (2) INCOME DERIVED FROM PROPERTY HELD UN DER TRUST TOTAL INCOME IS AN EXPRESSION, DEFINED IN TH E ACT IN SECTION 2(45) AS MEANING THE TOTAL AMOUNT OF INCOME REFERRED TO IN SECTION 5, COMPUTED THE MANNER LAID DOWN IN THE ACT. HOWEVER THERE IS NO DEFINITION OF INCOME THE WORDS INCOME IS AN EXPRESSION OF ELASTIC AMBIT AND THE COURTS HA VE ALWAYS QUALIFIED THEIR DESCRIPTION BY SAYING THAT IT IS NO T EXHAUSTIVE. IN THE ABSENCE OF ANY DEFINITION OF INCOME ONE HAS TO PROCEED ON THE BASIS OF IT AS A CONCEPT, AS UNDERST OOD IN GENERAL PARLANCE. INCOME WOULD ORDINARILY EXCLUDE A RECEIPT BY WAY OF CAPITAL. MERE GROSS RECEIPT CANNOT ALSO B E TAXED AS INCOME. IT MAY BE BROADLY STATED THAT WHAT IS TAXED IS NOT ALSO ANY GROSS RECEIPT. THE RECEIPT MUST BE REVE NUE IN NATURE AND IS TO BE TAXED AFTER EXCLUDING NECESSA RY OUTGOINGS. SECTION 11 CONTEMPLATES AN APPLICATION OF THE INCOM E FROM CHARITABLE PURPOSES. THE CHARITY CAN ACCUMULATE 25 PER CENT OF THE INCOME. THE APPLICATION AS WELL AS THE ACCUM ULATION HAS NECESSARILY (A BE THE INCOME AS ACCOUNTED FOR I N THE ACCOUNTS, AND NOT AS COMPUTED UNDER THE ACT, SUBJEC T OF COURSE TO WHAT LS PROVIDED IN SUB-SECTION (4) OF SE CTION 11. TAKING INTO ACCOUNT THE PURPOSE FOR WHICH THE CONDI TIONS OF SECTION 11(1)(A) AM IMPOSED, IT WOULD BE CLEAR MAT ONE HAS TO CONSIDER THE INCOME AS ARRIVED AT IN THE CONTEXT OF WHAT IS AVAILABLE IN THE HANDS OF THE ASSESSEE. SUBJECT OF COURSE TO 7 ITA NOS. 1589 & 1590/CHNY/2018 ANY ADJUSTMENT FOR EXPENSES EXTRANEOUS TO THE TRUST . IF THE EXPRESSION INCOME IS SO UNDERSTOOD, THEN ONE HAS T O TAKE THE ACCOUNTS OF THE ASSESSEE WITH REFERENCE TO THE RECEIPTS AND DEDUCT THEREFROM THE EXPENSES NECESSARY FOR EAR NING OR LOOKING AFTER THAT INCOME. THE NET AMOUNT THAT REMA INS WOULD BE AVAILABLE FOR DISTRIBUTION OR APPLICATION FOR CH ARITABLE PURPOSE. IN APPLYING THE INCOME FOR CHARITABLE PURP OSE, EVEN CAPITAL EXPENDITURE MAY BE INCURRED THEREFORE, THE NATURE OF THE EXPENDITURE IN THE HANDS OF THE ENTITY WHICH RE CEIVES THE MONEY IS NOT THE CRITERION. SO LONG AS THE ASSESSEE DIBURSES THE AMOUNT FOR CAPITAL OR REVENUE PURPOSES, WHETHER THE AMOUNTS AM UTILISED FOR CAPITAL OR REVENUE PURPOSES BY THE CHARITY CONCERNED, THE ASSESSEE WOULD HAVE COMPLIED WITH THAT PAN OF THE REQUIREMENT OF SECT ION II, NAMELY, APPLICATION OF THE INCOME FOR CHARITABLE PURPOSES. THE AUTHORIT IES WILL HAVE TO FIND OUT AS TO WHETHER THEY ARE REALLY CHAR ITABLE PURPOSES OR NOT. SUBJECT TO SUCH EXAMINATION, THE A PPLICATION OF INCOME FOR CHARITABLE PURPOSES WILL HAVE TO BE EXCLUDED AND IT IS ONLY THE BALANCE THAT WOULD REQUIRE EXAMI NATION FOR FINDING OUT WHETHER THE ASSESSEE HAS COMPILED WITH THE RULE OF ACCUMULATION TO THE EXTENT OF RS. 10, 000 OR 25 PER CENT OF THE INCOME, WHICHEVER IS HIGHER. THE TRIBUNAL HAS IN A WAY MIXED UP THE NOTION OF TO TAL INCOME IN UNDERSTANDING THE EXPRESSION INCOME FROM PROPERTY HELD UNDER TRUST. SECTION 14 OCCURS IN TH E CHAPTER COMPUTATION OF TOTAL INCOME. IT PROVIDES THAT ALL INCOME FOR THE PURPOSES OF CHARGE OF INCOME-TAX, AND COMPUTATI ON OF TOTAL INCOME BE CLASSIFIED UNDER CERTAIN HEADS. THE REFORE, THE COMPUTATION UNDER THE DIFFERENT CATEGORIES OR HEADS ARISES ONLY OF THE PURPOSES OF ASCERTAINING THE TOTAL INCO ME FOR THE 8 ITA NOS. 1589 & 1590/CHNY/2018 PURPOSES OF CHARGE. THOSE PROVISIONS CANNOT BE INTR ODUCED TO FIND OUT WHAT THE INCOME DERIVED FROM THE PROPER TY HELD UNDER TRUST TO BE EXCLUDED FROM THE TOTAL INCOME IS . FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER LII. THE INCOME FROM THE PROPERTIES HELD UNDER TRUST WOU LD HAVE TO BE ARRIVED AT III THE NORMAL COMMERCIAL MANNER W ITHOUT REFERENCE TO THE PROVISIONS WHICH AM ATTRACTED BY S ECTION 14. TWENTY-FIVE PER CENT THEREOF WILL HAVE TO BE ASCERT AINED AND IF THE ASSESSEE HAD ACCUMULATED MORE THAN TWENTY-FI VE PERCENT, THEN THE CONSEQUENCES CONTEMPLATED BY SECT ION 11 WILL FOLLOW: THUS, FROM THE ABOVE, IT IS CLEAR THAT THE PROVISIONS OF SEC. 11 ARE CATEGORICALLY AND CLEARLY DIFFERENT FR OM THOSE OF SEC. 14 OF THE ACT. THE DEDUCTIONS OR ALLOWANCES THAT AR E PROVIDED IN CHAPTER IV (I.E. SEC.14 TO SEC 59) ARE NOT RELEVANT / APPLICABLE WHILE DETERMINING THE INCOME FOR THE PURPOSE OF SEC . 11 OF THE ACT. THE COURT ALSO HELD THAT ONLY THE ACTUAL OUT G OINGS WHILE EARNING THE INCOME OF THE TRUST ARE TO BE TAKEN INT O ACCOUNT WHILE DETERMINING THE INCOME OF THE TRUST U/S. 11 O F THE ACT. THEREFORE, ITEMS LIKE DEPRECIATION WHICH ARE NOT TH E ACTUAL OUT GOINGS BUT A NOTIONAL EXPENDITURE PROVIDED U/S.32 O F THE ACT (CHAPTER IV) CANNOT FORM PART OF THE ALLOWABLE EXPE NDITURE WHILE COMPUTING THE INCOME OF THE TRUST FOR THE PURPOSES OF SEC. 11 OF THE ACT. IN VIEW OF THE ABOVE DECISION OF THE MADRAS HIGH CO URT AND ALSO THE SUPREME COURT OF INDIA. WHEN HE EXPENDITURE IS ALIOWED IN IT ENTIRETY AS DEDUCTION ANY FURTHER ALLOWANCE UND ER ANY OTHER SECTION WILL AMOUNT TO DOUBLE DEDUCTION AND ACCORDI NGLY NOT PERMITTED. 9 ITA NOS. 1589 & 1590/CHNY/2018 IN ANY CASE, IN THE PRESENT SITUATION PROVISION OF DEPRECIATION IS OUTSIDE THE PURVIEW OF SECTION11 OF THE I T ACT. TH E ASSESSEE, BEING A CHARITABLE ORGANIZATION, MAY PREPARE ITS IN COME AND EXPENDITURE ACCOUNT TO DETERMINE THE EXCESS OF INCO ME OVER EXPENDITURE, IN WHICH THE ASSESSEE IS ENTITLED TO D EBIT THE DEPRECIATION AS PER THE PROVISIONS OF CHAPTER IV OF THE ACT (I.E. SEC.14 TO SEC.80VVA OF THE ACT). IN SUCH INCOME AND EXPENDITURE ACCOUNT ALSO THE ASSESSEE IS NOT PERMIT TED TO DEBIT THE CAPITAL EXPENDITURE. HENCE THE CLAIM OF DEPRECI ATION IS DISALLOWED. 5. THE ARS JUSTIFICATION FOR CLAIMING RETIREMENT F UND (RS. 1240418/-) AND GRATUITY FUND (867296/-) AS APPLICAT ION OF INCOME WAS CONSIDERED. HOWEVER, THE SAME IS NOT ACC EPTABLE AS THESE ARE ONLY NON-FUNDED LIABILITY AND NO PAYME NT TO ANY FUND WAS ACTUALLY MADE. THERE IS NO ACTUAL CASH OUT FLOW THEREFORE THIS CLAIM OF RETIREMENT FUND AND GRATUIT Y FUND AS APPLICATION OF INCOME IS NOT ALLOWED. 6. THE ASSESSEE HAD CLAIMED RS. 5,18,881/- AS BAD D EBT WRITTEN OFF. THE ARS JUSTIFICATION IN THIS REGARD WAS CON SIDERED. HOWEVER, THE CLAIM OF BAD DEBTS WRITTEN OFF BY THE ASSESSEE IS NOT ACCEPTABLE AS THERE IS NO ACTUAL OUTFLOW OF CAS H AND IT IS MERELY A BOOK ADJUSTMENT. MOREOVER, IT IS ONLY A NO TIONAL EXPENDITURE AND THEREFORE CANNOT BE CONSTRUED AS AP PLICATION OF INCOME. HENCE, THE CLAIM OF RS. 518881/- AS BAD DEB TS WRITTEN OFF IS DISALLOWED. THE ASSESSEES CLAIM OF RS.1182 64/- AS INVENTORIES WRITTEN OFF IS ALSO DISALLOWED ON THE S IMILAR GROUNDS THAT THERE IS NO CASH OUT FLOW AND THEREFORE CANNOT BE CLAIMED AS APPLICATION OF INCOME. 10 ITA NOS. 1589 & 1590/CHNY/2018 7. THE CLAIM OF RS.1,52,402/- AS EMPLOYEES MEDICAL SELF INSURANCE IS ALSO NOT ACCEPTABLE AS APPLICATION OF INCOME AS THIS IS ONLY A PROVISION TO THAT FUND AND NO ACTUAL EXPENDITURE WAS INCURRED. SINCE THERE IS NO ACTUAL PAYMENT, THE SAME CANNOT BE CLAIMED AS APPLICATION OF INCOME ARID THE REFORE THE CLAIM OF RS.1,52,402/- AS EMPLOYEES MEDICAL SELF IN SURANCE IS DISALLOWED. 8. THE ASSESSEE HAD CLAIMED RS. 30,224/- AS GIOB AL BASIC LIFE INSURANCE. THIS CLAIM IS ALSO NOT ALLOWABLE A S IT IS ONLY A PROVISION TO THAT FUND AND NO ACTUAL PAYMENT IS INV OLVED. THEREFORE, THE SAME CANNOT BE CLAIMED AS APPLICATIO N. HENCE, THE CLAIM OF RS. 30,224/- AS GIOBAL BASIC LIFE INSU RANCE IS DISALLOWED. 5. BEING AGGRIEVED BY ASSESSMENT ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE LEARNED CIT(A). BEFORE, LEARNED CIT(A), ASSESSEE HAS CHALLENGED ADDITIONS MADE BY ASSESSING OFFICER TOWARDS DISALLOWANCE OF DEPRECIAT ION AND DENIAL OF CARRY FORWARD OF EXCESS APPLICATION OF I NCOME TO SUBSEQUENT YEARS IN LIGHT OF CERTAIN JUDICIAL PRECE DENTS, INCLUDING DECISION OF HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE MEDICAL TRUST OF THE SEVENTH DAY ADVENTISTS V S. DIT, IN T.C.A NO.949 OF 2015 AND 771 OF 2016. THE ASSESSE E HAS ALSO CHALLENGED ADDITIONS MADE BY ASSESSING OFFICER TOWARDS 11 ITA NOS. 1589 & 1590/CHNY/2018 DISALLOWANCE OF CONTRIBUTION OF EMPLOYEES RETIREMEN T FUND, GRATUITY FUND, PROVISION FOR BAD DEBTS. THE LEARNED CIT(A) AFTER CONSIDERING RELEVANT SUBMISSIONS OF ASSESSEE AND A LSO FOLLOWING DECISION OF HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF MEDICAL TRUST OF THE SEVENTH DAY ADVENTISTS VS. DIT, (SUPRA) HAS ALLOWED DEPRECIATION CLAIMED ON FIXED A SSETS. THE LEARNED CIT(A) HAS FURTHER ALLOWED CARRY FORWARD OF EXCESS APPLICATION OF INCOME FOR CHARITABLE PURPOSES TO SU BSEQUENT YEAR AND TO SET OFF AGAINST INCOME OF SUBSEQUENT YE ARS. HOWEVER, HE HAS CONFIRMED ADDITIONS TOWARDS CONTRIB UTION TO RETIREMENT FUND, GRATUITY FUND AND PROVISION FOR B AD DEBTS ON THE GROUND THAT ASSESSEE HAS FAILED TO FILE EVIDENC ES TO PROVE THAT FINDINGS RECORDED BY ASSESSING OFFICER THAT TH ERE IS NO OUTFLOW OF CASH TO CONSIDER THE ABOVE EXPENDITURE A S APPLICATION OF INCOME. AGGRIEVED BY THE LEARNED CIT (A) ORDER, REVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED DR FOR THE REVENUE FAIRLY ACCEPTED T HAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIO N OF HONBLE JURISDICTIONAL HIGH COURT, IN THE CASE OF MEDICAL TRUST OF THE 12 ITA NOS. 1589 & 1590/CHNY/2018 SEVENTH DAY ADVENTISTS VS. DIT, (SUPRA). HOWEVER, H E STRONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER IN LIGHT O F DECISION OF ITAT, CHENNAI BENCH IN THE CASE OF ANJUMAN-E-HIMAYT H-E- ISLAM VS. ADIT(EXEMPTION) (2015) 154 ITD 755. 7. THE LEARNED AR FOR THE ASSESSE, ON THE OTHER HAN D, SUBMITTED THAT ISSUE OF DEPRECIATION ON FIXED ASSET S AND CARRY FORWARD OF EXCESS APPLICATION OF INCOME IS SQUAREL Y COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF HONBLE JURIS DICTIONAL HIGH COURT IN THE CASE OF MEDICAL TRUST OF THE SEVE NTH DAY ADVENTISTS VS. DIT, (2017) 84 TAXMANN.COM 202, WHE RE IT HAS BEEN HELD THAT EVEN THOUGH ASSESSEE HAS CLAIMED PUR CHASE OF FIXED ASSETS AS APPLICATION OF INCOME, ASSESSEE CAN CLAIM DEPRECIATION ON FIXED ASSETS. THE HONBLE HIGH COUR T FURTHER HELD THAT EXCESS APPLICATION OF INCOME FOR CHARITAB LE PURPOSES CAN BE CARRY FORWARD TO SUBSEQUENT YEARS AND CAN B E ADJUSTED AGAINST INCOME DERIVED FROM PROPERTY HELD UNDER THE TRUST. 8. WE HAVE HEARD BOTH PARTIES, PERUSED MATERIALS AV AILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. WE FIND THAT LEARNED CIT(A) HAS ALLOWED DEPRECIATION CLAIMED ON FIXED ASSETS AND CARRY FORWARD OF EXCESS APPLICATI ON OF INCOME 13 ITA NOS. 1589 & 1590/CHNY/2018 FOR CHARITABLE PURPOSES TO SUBSEQUENT YEARS BY FOLL OWING DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF MEDICAL TRUST OF THE SEVENTH DAY ADVENTISTS VS. DIT (SUPRA). THE RELEVANT FINDINGS OF LEARNED CIT(A) ARE AS UNDE R:- 4. DECISION: I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE SUBMISSIONS MADE BY THE A PPELLANT. THE FIRST ISSUE IS WITH REGARD TO DISALLOWANCE OF D EPRECIATION ON ASSETS CLAIMED AS APPLICATION OF INCOME BY THE APPE LLANT. IT IS THE VIEW OF THE ASSESSING OFFICER THAT THE EXPENDIT URE IN CONNECTION WITH FIXED ASSETS WAS ALLOWED IN ITS ENT IRETY AT THE TIME OF ACQUISITION OF THESE ASSETS AND FURTHER ALL OWANCE UNDER ANY OTHER SECTION OF THE INCOME TAX ACT WILL AMOUNT TO DOUBLE DEDUCTION AND THEREFORE NOT PERMISSIBLE. THE ASSESS ING OFFICER ALSO OBSERVED THAT DEPRECIATION ALLOWANCE IS A NOTI ONAL EXPENDITURE THAT CANNOT BE TREATED AS PART OF APPLI CATION OF INCOME FOR THE PURPOSES OF SECTION 11 OF THE INCOME TAX ACT. DURING THE APPELLATE PROCEEDINGS, THE AR FURNISHED WRITTEN SUBMISSIONS AND PUT FORTH HIS ARGUMENTS TO LEVERAGE THE CONTENTION THAT THE AO WAS NOT JUSTIFIED IN FOLLOWI NG THE DEPRECIATION CLAIM. THE GROUNDS OF APPEAL AND THE SUBMISSIONS OF THE APPELLANT HAVE BEEN DULY CONSIDERED. TO RESOLVE THE ISSUE ON HAND IT IS RELEVANT HERE TO REFER TO THE DECISION O F THE JURISDICTIONAL HIGH COURT IN TCA NO.949 OF 2015 AND 771 OF 2016 DATED 08.08.2017 IN THE CASE OF MEDICAL TRUST OF THE SEVENTH DAY ADVENTISTS VS. DIT, EXEMPTION-ILL, CHEN NAI. THE HONBLE HIGH COURT OF MADRAS WITH REGARD TO DEPRECI ATION ALLOWABLE IN THE CASE OF A CHARITABLE TRUST HELD AS FOLLOWS: 20. DEPRECIATION, AS DEFINED IN SPICER AND PEGLERS BOOK- KEEPING AND ACCOUNTS IS THE MEASURE OF THE EXHAUSTI ON OF THE EFFECTIVE LIFE OF A FIXED ASSET OWING TO USE OR OBS OLESCENCE DURING A GIVEN PERIOD. IT MAY BE REGARDED AS THAT P ART OF THE COST OF THE ASSET WHICH WILL NOT BE RECOVERABLE WHE N THE ASSET IS FINALLY PUT OUT OF USE. THE OBJECT OF PROVIDING FOR DEPRECIATION IS 14 ITA NOS. 1589 & 1590/CHNY/2018 TO SPREAD THE EXPENDITURE INCURRED IN ACQUIRING THE ASSET OVER ITS EFFECTIVE LIFETIME, AND THE AMOUNT OF PROVISION MADE IN RESPECT OF AN ACCOUNTING PERIOD IS EXTENDED TO REPR ESENT THE PROPORTION OF SUCH EXPENDITURE WHICH HAS EXPIRED DU RING THAT PERIOD. 21 . THE NECESSITY OF PROVIDING FOR DEPRECIATION E MANATES FROM THE FACT THAT ONCE AN ASSET CEASES TO BE EFFECTIVE, IT WILL HAVE TO BE REPLACED. PROVIDING FOR DEPRECIATION WOULD ENSUR E SETTING ASIDE OUT OF THE REVENUE OF AN ACCOUNTING PERIOD, T HE ESTIMATED AMOUNT BY WHICH THE CAPITAL INVESTMENT HAS EXPIRED DURING THAT PERIOD. THIS PROVISION, INCURRED FOR THE USE OF THA T ASSET FOR THE PURPOSE OF EARNED PROFIT SHOULD BE CHARGED AGAINST THOSE PROFITS AS AND WHEN EARNED. SPICER. AND PEGLER AT P AGE 45, STATES AS FOLLOWS:- IF DEPRECIATION IS NOT PROVIDED FOR, THE BOOKS WIL L NOT CONTAIN A TRUE RECORD OF REVENUE OR CAPITAL. IF THE ASSET WERE HIRED INSTEAD OF PURCHASED, THE HIRING FEE WOU LD BE CHARGED AGAINST THE PROFITS; HAVING BEEN PURCHASED, THE ASSET IS IN EFFECT, THEN HIRED BY CAPITAL TO REVENU E, AND THE TRUE PROFIT CANNOT BE ASCERTAINED UNTIL AN ANAL OGOUS CHARGE FOR THE USE OF THE ASSET HAS BEEN MADE. MOREOVER, UNLESS PROVISION IS MADE FOR DEPRECIATION , THE BALANCE SHEET WILL NOT PRESENT A TRUE AND FAIR VIEW OF THE STATE OF AFFAIRS SINCE THE ASSETS WILL BE SHOWN AT AN AMOUNT WHICH IS IN EXCESS OF THE TRUE AMOUNT OF THE UNEXPIRED EXPENDITURE INCURRED ON THEIR ACQUISITION . 22. THE CLAIM OF DEPRECIATION IS THUS PART OF STAND ARD ACCOUNTING PRACTICE WHICH IS REQUIRED FOR FAIR PRES ENTATION OF A COMPANYS L1NANCIALS. THE COMPUTATION OF INCOME IN THE CASE OF AN ENTITY TO WHICH SECTION II IS PLICABLE WOULD BE IN TWO STAGES. FIRSTLY, THE DETERMINATION OF THE PROFIT ARRIVED AT , WHICH WOULD BE THE TOTAL RECEIPTS NET OF EXPENDITURE AND DEPRECIAT ION INCURRED IN EARNING THE RECEIPTS, AND SECONDLY THE STAGE OF APP LICATION TO CHARITABLE /RELIGIOUS OBJECTS. THE TWO STAGES ARE D ISTINCT AND ARE REQUIRED TO BE COMPLIED WITH CONSECUTIVELY IN O RDER TO DETERMINE THE CORRECT INCOME AND ITS APPLICATION. 15 ITA NOS. 1589 & 1590/CHNY/2018 23. THE QUESTION BEFORE THE SUPREME COURT IN THE MA TTER OF ESCORTS RELATED TO DUAL CLAIMS UNDER SECTION 35 OF THE ACT IN RELATION TO THE SAME ASSET THE FIRST WEIGHTED DEDUC TION AND THE SECOND, DEPRECIATION. THUS, TWO BENEFITS WERE EXTEN DED IN RESPECT OF THE VERY SAME ASSET- WE ARE FACED WITH A N ENTIRELY DIFFERENT AND DISTINCT POSITION IN THE PRESENT BATC H OF APPEALS ONE THAT INVOLVES A CLAIM FOR EXEMPTION IN RESPECT OF INCOME EARNED FROM PROPERTY HELD FOR CHARITABLE OR RELIGIO US PURPOSES- WE SEE NO DOUBLE BENEFIT THAT IS EXTENDED TO THE AS SESSEE IN THIS REGARD. 24. TRUTH TO TELL, THIS COURT IN THE MATTER OF CALA VALA CUNNAN CHARITIES, HAS DECIDED THE QUESTION NOW UNDER CONSI DERATION IN FAVOUR OF THE ASSESSEE AND WE COULD WELL HAVE DECID ED THIS PATCH OF APPEALS SIMPLY ON THE STRENGTH OF THE AFOR ESAID DECISION. WE ARE HOWEVER PERSUADED TO PROCEED FURTH ER, WITH THE DISCUSSION SINCE A CONFLICTING VIEW HAS BEEN EX PRESSED BY THE KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS (SUPRA) THOUGH THE ATTENTION OF THE DIVISION BENCH OF THE KERALA HIGH COURT WAS DRAWN TO THE DECISION IN RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES (SUPRA) AND SEVERAL DECISIO NS ALONG SIMILAR LINES THE COURT WAS PERSUADED TO TAKE A CON TRARY VIEW PREFERRING TO FOLLOW THE RATIONALE OF THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF ESCORTS (SUPRA). 25. AS NOTED BY US EARLIER, THE JUDGMENT OF THE SUPREME COURT IN ESCORTS URNS ON AN ENTIRELY DIFFERENT POSITION OF AW AND WOULD NOT IMPACT THE ISSUE BEING DISCUSSED IN THE PRESENT CASE. 26. WE ARE SUPPORTED IN OUR VIEW BY A PLETHORA OF DECISIONS OF VARIOUS HIGH COURTS THE BOMBAY HIGH COURT IN THE CA SE OF CIT V. MUNISUVRAT JAIN (1994 TAX LAW REPORTER 1084) AN D CIT VS. FRAMJEE CAWASJEE INSTITUTE (109 CTR 463); KARNATAK A HIGH COURT IN CIT VS SOCIETY OF THE SISTERS & ST-ANNE (1 46 JTR 28); MADHYA PRADESH HIGH COURT IN CIT VS RAIPUR PALLOTT INE SOCIETY (180 JTR 579); GUJARAT HIGH COURT IN CIT VS . SHETH MANILAL RACHHNODDASVISHRAM BHAVAN TRUST 198 ITR 598 ; PUNJAB AND HARYANA HIGH COURT IN CIT VS. MARKET COM MITTEE PIPLI (330 ITR 16) AND CIT VS. TINY TOTS EDUCATION SOCIETY (330 ITR 21); MADHYAPRADESH HIGH COURT IN CIT VS. DEVI S AKUNTALA 16 ITA NOS. 1589 & 1590/CHNY/2018 THARAL CHARITABLE FOUNDATION (358 ITR 452) AND THE CALCUTTA HIGH COURT IN CIT VS. SILIUGURI REGULATED MARKET CO MMITTEE (358 ITR 51). IN ADDITION THE DELHI HIGH COURT IN D IT VS. VISHWA JAGRITI MISSION 262 CTR 558 AND THE KARNATAKA HIGH COURT IN DIT (EXEM) VS AL AMEEN CHARITABLE FUND TRUST (2016) 67 TAXMANN.COM 160 HAVE ACCEPTED THE CLAIM OF THE ASSE SSEE DISTINGUISHING BOTH THE JUDGEMENT OF THE SUPREME CO URT IN ESCORTS AS WELL AS THAT OF THE KERALA HIGH COURT. 27. IN VIEW OF THE DISCUSSION ABOVE, THE QUESTION O F LAW ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FURTHER AS REGARDS INSERTION OF SUB-SECTION (6) TO SEC.11 OF THE ACT W.E.F. 01.04.2015 THE JURISDICTIONAL HIGH COUR T HAS OBSERVED AS FOLLOWS: 35. PARA 7.6 OF THE CIRCULAR STATES THAT THE AMENDM ENT WOULD APPLY TO ASSESSMENT YEAR 2015-16 AND SUBSEQUENT ASS ESSMENT YEARS. RELIANCE WAS PLACED ON THE JUDGMENT OF THE S UPREME COURT IN CIT VS. ALOM EXTRUSIONS LTD. (2009) AND CI T VS. VATIKA TOWNSHIP (367 ITR 466) FOR THE PROPOSITION THAT AN AMENDMENT THAT INCREASES THE LIABILITY OF AN ASSESSEE IS LIAB LE TO BE APPLIED ONLY PROSPECTIVELY. MR. NARAYANASWAMY WOULD OBJECT STATING THAT THE AMENDMENT HAD BEEN INSERTED TO CORRECT AN EXISTING ANOMALY AND THUS WAS CLEARLY CLARIFICATORY, AND CON SEQUENTLY RETROSPECTIVE IN OPERATION. 36. WE DO NOT AGREE WITH THE REVENUE. THE AMENDMENT , INSERTED SPECIFICALLY WITH EFFECT FROM ASSESSMENT Y EAR 2015- 2015 SEEKS TO DISTURB A VESTED RIGHT THAT HAS ACCRU ED TO THE ASSESSEE. THE AMENDMENT DOES NOT PURPORT TO BE CLAR IFICATORY, ON THE OTHER HAND, THE EXPLANATORY MEMORANDUM MAKES IT APPLICABLE ONLY W.E.F. A.Y. 2015-16 AND APPLICATION OF THE AMENDMENT RETROSPECTIVELY WOULD CERTAINLY LEAD TO A GREAT DEAL OF HARDSHIP TO THE ASSESSEE. WE ARE THUS OF THE VIE W THAT THE PROVISIONS OF SECTION 11(6) OF THE ACT INSERTED WIT H EFFECT FROM 1.4.2015 SHALL OPERATE PROSPECTIVELY WITH RESPECT T O ASSESSMENT YEAR 2015-16 ONLY. 17 ITA NOS. 1589 & 1590/CHNY/2018 RESPECTFULLY ABIDING BY THE DECISION OF THE JURISDI CTIONAL HIGH COURT ON THE SAID ISSUE IN THE CASE OF MEDICAL TRUS T OF THE SEVENTH DAY ADVENTISTS VS. DIT, EXEMPTION-ILL, CHEN NAI, I HOLD THAT THE APPELLANT IS ENTITLED TO CLAIM DEPRECIATIO N. THE APPELLANT SUCCEEDS ON THIS GROUND. 4.1. THE SECOND ISSUE IS WITH REGARD TO DENIAL OF C ARRY FORWARD OF EXCESS APPLICATION OF EARLIER YEARS BY THE ASSES SING OFFICER. IT IS RELEVANT HERE TO REFER TO THE DECISION OF THE HI GH COURT OF MADRAS IN THE CASE OF CIT VS MATRISEVA TRUST (242 I TR 20) (MAD) WHEREIN THE JURISDICTIONAL HIGH COURT OBSERVE D AS FOLLOWS: 5. WITH REGARD TO THE SECOND QUESTION, THE TRIBUNAL HAS HELD THAT THE TRUST IS ENTITLED TO SET OFF THE AMOUNT OF EXCESS APPLICATION OF THE LAST YEAR AGAINST THE DEFICIENCY OF RS. 82,516 OF THE PRESENT ASSESSMENT YEAR. WHEN SIMILAR QUESTIONS CAME UP BEFORE THE RAJASTHAN HIGH COURT AND THE GUJARAT HIGH COURT IN THE CASES OF CI T V. MAHARANA OF MEWAR CHARITABLE FOUNDATION (1987)164 I TR 439 AND CIT V. SHRI PLOT SWETAMBER MURTI PUJAK JAIN MAN DAL (1995 211 ITR 239), RESPECTIVELY, BOTH THE RAJASTHAN HIGH COURT AND THE GUJARAT HIGH COURT HAVE -ANSWERED THE QUESTION S IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 6. FOLLOWING THE AFORESAID DECISIONS OF THE RAJASTH AN AND GUJARAT HIGH COURTS. WE ANSWER THE SECOND QUESTION REFERRED TO US IN FAVOUR OF THE ASSESSEE AND AGAINST THE REV ENUE. THIS VIEW WAS FURTHER REINFORCED IN THE CASE OF DIT VS MEDICAL TRUST OF THE SEVENTH DAY ADVENTIST (SUPRA) WHEREIN THE RATIONALE OF THE DECISION IN MATRISEVA TRUST (SUPRA) WAS APPR OVED. THE HONBLE HIGH COURT OF RAJASTHAN IN THE CASE OF CIT V S. MAHARANA OF MEWAR CHARITABLE FOUNDATION (SUPRA) OBS ERVED THAT THERE IS NOTHING IN THE LANGUAGE OF SECTION 11 (1)(A) TO INDICATE THAT THE EXPENDITURE INCURRED IN THE EARLI ER YEAR CANNOT BE MET OUT OF THE INCOME OF THE SUBSEQUENT YEAR AND UTILISATION OF SUCH INCOME FOR MEETING THE EXPENDITURE OF THE E ARLIER YEAR WOULD NOT AMOUNT TO SUCH INCOME BEING APPLIED FOR C HARITABLE PURPOSES, FURTHER ELABORATING ON THIS, THE HONBLE HIGH COURT OF 18 ITA NOS. 1589 & 1590/CHNY/2018 MADHYA PRADESH IN THE CASE OF CIT VS. GUJRATI SAMAJ (213 TAXMAN 182) (MP) DECLARED THAT WHERE EXPENSES FOR C HARITABLE AND RELIGIOUS PURPOSES INCURRED IN EARLIER YEAR ARE ADJUSTED AGAINST INCOME OF SUBSEQUENT YEAR, THEN THE INCOME OF THE SUBSEQUENT YEAR CAN BE SAID TO HAVE BEEN APPLIED FO R CHARITABLE AND RELIGIOUS PURPOSES. IN VIEW OF THE ABOVE I HAVE NO HESITATION IN HOLDIN G THAT THE ASSESSING OFFICER ERRED IN DENYING THE BENEFIT OF S EC. 11 & 12 FOR THE ADJUSTMENT OF EXCESS APPLICATION MADE IN TH E EARLIER ASSESSMENT YEARS. THE APPELLANT SUCCEEDS ON THIS GR OUND. 9. WE FURTHER NOTED THAT ABOVE FINDINGS OF LEARNED CIT(A) IS FURTHER SUPPORTED BY DECISION OF HONBLE SUPREME C OURT IN THE CASE OF CIT VS. SUBROS EDUCATIONAL SOCIETY (2018) 9 6 TAXMAN 652 (SC), WHERE HONBLE SUPREME COURT HELD THAT AN Y EXCESS EXPENDITURE INCURRED BY TRUST / CHARITABLE INSTITUT ION IN EARLIER ASSESSMENT YEAR COULD BE ALLOWED TO BE SET OFF AGAI NST INCOME OF SUBSEQUENT YEARS BY INVOKING SECTION 11 OF THE A CT. WE FURTHER NOTED THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION (2 003) 131 TAMANN.COM 386 HAD CONSIDERED AN IDENTICAL ISSUE AN D HELD THAT EXCESS APPLICATION OF INCOME FOR CHARITABLE PU RPOSES CAN BE CARRIED FORWARD TO SUBSEQUENT YEAR AND TRUST IS ENTITLED TO SET OFF AMOUNT OF EXCESS APPLICATION OF THE LAST YEAR A GAINST INCOME DERIVED FROM PROPERTY HELD UNDER THE TRUST. THE ABO VE FINDING 19 ITA NOS. 1589 & 1590/CHNY/2018 RECORDED BY LEARNED CIT(A) IS UNCONTROVERTED BY REV ENUE. ALTHOUGH, LEARNED DR HASSUPPORTED THE ORDER OF ASSE SSING OFFICER AND IN LIGHT OF DECISION OF ITAT., CHENNAI BENCH IN THE CASE OF ANJUMAN-E-HIMAYTH-E-ISLAM VS. ADIT(EXEMPTIO N) (SUPRA), WE FIND THAT HONBLE JURISDICTIONAL HIGH C OURT HAS CONSIDERED THE ABOVE ISSUE AND BY FOLLOWING NUMBE R OF DECISIONS OF OTHER HIGH COURTS HAS HELD THAT DEPREC IATION ON FIXED ASSETS IS ALLOWABLE, EVEN THOUGH TRUST CLAI MED AMOUNT INCURRED FOR PURCHASE / ACQUISITION OF CAPITAL A SSET AS APPLICATION OF INCOME. SIMILARLY, HONBLE HIGH COUR T HAS FURTHER HELD THAT EXCESS APPLICATION OF INCOME OF CHARITABL E TRUST CAN BE CARRIED FORWARD AND TRUST IS ENTITLED FOR SET OFF O F EXCESS APPLICATION OF INCOME IN THE EARLIER YEAR AGAINST I NCOME OF THE TRUST IN SUBSEQUENT YEARS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO ERROR IN THE FINDINGS RECORD ED BY LEARNED CIT(A) AND HENCE, WE ARE INCLINED TO UPHOLD FINDING S OF LEARNED CIT(A) AND REJECT GROUND TAKEN BY REVENUE. 10. IN THE RESULT, APPEAL FILED BY REVENUE FOR ASS ESSMENT YEAR 2010-11 IS DISMISSED. ITA NO.1590/CHEN/2018 (A.Y:2012-13): 20 ITA NOS. 1589 & 1590/CHNY/2018 11. THE FACTS AND ISSUES INVOLVED IN ITA NO. 1590/C HNY/2019 ARE IDENTICAL TO THE FACTS AND ISSUES WHICH WE HAV E ALREADY CONSIDERED IN ITA NO.1589/CHNY/2018 FOR THE ASSES SMENT YEAR 2010-11. THE REASONS GIVEN BY US IN THE PRECE DING PARAGRAPHS OF ITA NO.1589/CHNY/2018 SHALL MUTATIS MUTANDIS APPLY TO THIS APPEAL AS WELL. THEREFORE, FOR SIMILA R REASONS, WE DISMISS APPEAL FILED BY REVENUE FOR ASSESSMENT YEAR 2012-13. 12. IN THE RESULT, APPEALS FILED BY REVENUE FOR BOT H ASSESSMENT YEARS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MARCH, 2021 SD/- SD/- ( . ) ( . ) (V.DURGA RAO) (G.MANJUNATHA ) ! $ / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER ! /CHENNAI, ' / DATED 3 RD MARCH , 2021 DS )* +* /COPY TO: 1. APPELLANT 2. RESPONDENT 3. , () /CIT(A) 4. , /CIT 5. * 1 /DR 6. /GF .