Assistant Commissioner of Income-tax, V. Shreyas Pratisthan, Aurangabad

ITA 1758/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0736 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 22-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR CHAWARE
• Keywords: Capital asset; Business income; Depreciation; Charitable institution; Cost of acquisition; Capital expenditure
• Section: 32; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1758/PN/2014 '% % / ASSESSMENT YEAR : 2010-11 ACIT, CENTRAL, AURANGABAD . / APPELLANT V/S SHREYASH PRATISTHAN, GUT NO.258, SATARA TANDA, SATARA, AURANGABAD PAN : AAHTS4861L . /RESPONDENT / APPELLANT BY : SHRI ANIL KUMAR CHAWARE / RESPONDENT BY : SHRI NIKHIL PATHAK / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE OR DER DATED 09-06-2014 OF THE CIT(A), AURANGABAD RELATING TO A SSESSMENT YEAR 2010-11. 2. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, WHETHER THE LD. CIT(A) ERRED IN ALLOWING DEPRECIATI ON ON THE ASSET, ACQUISITION OF WHICH HAS ALREADY BEEN ALLOWED AS 'APPL ICATION OF INCOME' . 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AN D IN LAW, WHETHER THE LD. CIT(A) ERRED IN NOT APPRECIATING TH E FACT THAT ALLOWING DEPRECIATION ON THE ASSET AGAIN, WOULD RESULT IN DOUBL E DEDUCTION, WHICH CANNOT BE ALLOWED , AS HELD IN THE CASE OF ESCORTS LTD., & ORS. VS. UNION OF INDIA (1993) 199 ITR 43 (SC). / DATE OF HEARING :03.10.2016 / DATE OF PRONOUNCEMENT: 05.10.2016 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, WHETHER THE LD . CIT(A) ERRED IN NOT RELYING UPON THE DECISION OF HON'BLE KERALA HIGH COURT IN THE CASE OF LISSIE MEDICA L INSTITUTION VS ACIT (76 DTR 372) , WHETHER IT HAS BEEN HELD THAT DEPRECIATION OF THE CAPITAL ASSET, IS NOT ALLOWABLE AGAIN. 4. THE APPELLANT CRAVES LEAVE TO ADD , ALTER, MODIFY, DELETE, AND AMEND ANY OF THE GROUNDS, AS PER THE CIRCUMSTANCES OF T HE CASE. 5. THE APPELLANT PRAYS LEAVE TO ADDUCE SUCH FURTHER E VIDENCE TO SUBSTANTIATED ITS CASE, AS THE OCCASION MAY DEMAND . 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PUBLIC CHARITABLE TRUST REGISTERED UNDER BOMBAY PUBLIC TRUST AC T, 1950 AND ALSO REGISTERED U/S.12A OF THE I.T. ACT. THE PREDOMIN ANT OBJECT OF THE TRUST IS THAT OF IMPARTING EDUCATION IN THE FIELD OF ENGINEERING AND MANAGEMENT. IT FILED ITS RETURN OF INCOME ON 29- 03-2011 DECLARING TOTAL INCOME AT NIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSE E HAS CLAIMED DEPRECIATION OF RS.2,46,56,825/- ON CAPITAL ASSETS, TH E COST OF WHICH HAD ALREADY BEEN CLAIMED AS APPLICATION OF MONEY U/S.11(1) OF THE I.T. ACT IN THE PRECEDING YEARS. ACCORDING TO THE AO SINCE THE COST OF ASSET HAS ALREADY BEEN ALLOWED AS APPLIC ATION OF INCOME, THEREFORE, ITS WDV WAS NIL AND HENCE THERE WAS NO AMOUNT LEFT ON WHICH DEPRECIATION COULD BE CLAIMED. HE, THEREFORE, HE LD THAT THE ALLOWANCE OF DEPRECIATION AMOUNTS TO DOUBLE DEDU CTION OF THE SAME AMOUNT INVESTED IN CAPITAL ASSET WHICH IS NOT PE RMISSIBLE UNDER THE ACT. FOR THE ABOVE PROPOSITION, THE AO RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD. AND OTHERS REPORTED IN 199 ITR 43 WHEREIN IT HAS BEEN LAID D OWN THAT DOUBLE DEDUCTION IS NOT PERMISSIBLE IN THE SCHEME OF THE I. T. ACT UNLESS THERE IS A CLEAR STATUTORY MANDATE TO THAT EFFECT. 4. HE FURTHER NOTED THAT THE LAW IN THIS REGARD HAS BE EN CHANGED W.E.F. 01-04-1989 IN VIEW OF INSERTION OF CLAUSE (D) IN SUB- SECTION (1) OF SECTION 11 BY THE DIRECT TAX LAWS ( AMENDED ) ACT, 1989. IN VIEW OF THE ABOVE AMENDMENT, THE AMOUNT RECE IVED BY THE TRUST TOWARDS CORPUS IS EXEMPT AND HENCE THE INVESTME NT OUT OF SUCH CORPUS IS ALSO NOT ALLOWABLE AS APPLICATION FOR THE PUR POSE OF THE TRUST. IN SUCH A CASE, THE DEPRECIATION IS ALLOWABLE AS THE SAME WILL NOT AMOUNT TO DOUBLE DEDUCTION. DISTINGUISHING THE VARIO US DECISIONS RELIED ON BEFORE HIM THE AO DISALLOWED THE CLAIM OF DEPRECIATION OF RS.2,46,56,925/-. 5. BEFORE CIT(A) THE ASSESSEE RELYING ON VARIOUS DECISIONS SUBMITTED THAT DEPRECIATION IS ALLOWABLE EVEN IF THE COST OF THE ASSET IS CLAIMED AS APPLICATION OF THE INCOME FOR THE OBJECTS OF THE TRUST IN THE EARLIER YEARS. 6. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) IN A VERY DETAILED AND ELABORATE ORDER ALLOWED THE CLAIM OF DEPRECIATION OF RS.2,46,56,825/- BY OBSERVING AS UNDER : 7. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND RIVAL CONTENTIONS. ON PERUSAL OF THE SAME, IT HAS BEEN NOTIC ED THAT IN ORDER TO DECIDE THE ISSUE, THE VARIOUS DECISIONS RELIED ON BY THE APPELLANT AND BY THE A.O. ARE TO BE CAREFULLY PERUSED AND HENCE TH E RATIO LAID DOWN IN THE SAID DECISIONS IN BRIEF IS NOTED AS UNDER (I) CIT VS. FRAMJEE CAWASJEE INSTITUTE (1993) 109 CT R 463 (BOMBAY) IN THIS CASE, IT HAS BEEN LAID DOWN THAT DEPRECIATIO N ON DEPRECIABLE ASSETS HAD TO BE TAKEN INTO ACCOUNT IN COM PUTING INCOME OF TRUST ALTHOUGH THE AMOUNT SPENT ON ACQUIRING SUCH ASSETS HAD BEEN TREATED AS APPLICATION OF INCOME OF THE TRUST IN THE YEAR IN WHICH ASSETS WERE ACQUIRED. (II) CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION (IBPS) 264 ITR 110 (BOMBAY) IN THIS CASE, IT HAS BEEN LAID DOWN THAT DEPRECIATION IS ALLOWABLE ON THE ASSETS THE COST OF WHICH HAS BEEN FULLY ALLOWED A S APPLICATION OF INCOME U/S 11 IN PAST YEARS. (III) CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE (198 4) 146 ITR 28 (KARNATAKA) IN THIS CASE, IT HAS BEEN LAID DOWN THAT FOR COMPUTING INCOME FOR THE PURPOSES OF SECTION 11, DEPRECIATION ON BUILDING H AS TO BE ALLOWED. (IV) CIT VS. RAIPUR PALLOTTINE SOCIETY (1989) 180 I TR 579 (MP) IN THIS CASE, IT HAS BEEN LAID DOWN THAT THE CLAIM OF THE ASSESSEE CHARITABLE TRUST IN RESPECT OF DEPRECIATION ON ASSET HE LD BY IT CANNOT BE DENIED ON THE GROUND THAT IT HAD NO BUSINESS INCOME FALLING U/S 28 IS NOT JUSTIFIED. (V) CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST (1992) 198 ITR 598 (GUJARAT) IN THIS CASE, IT HAS BEEN LAID DOWN THAT INCOME FOR TH E PURPOSE OF 11(1)(A) HAS TO BE COMPUTED NOT IN ACCORDANCE WIT H THE PROVISIONS OF THE ACT BUT IN ACCORDANCE WITH THE NORMAL RULES O F ACCOUNTANCY UNDER WHICH THE DEPRECIATION ON HOUSE PROPERTY HAS TO BE ALLOWED. (VI) S.RM.M.CT.M. TIRUPPANI TRUST VS CIT 230 ITR 636 (SC) IN THIS CASE, IT HAS BEEN LAID DOWN THAT ASSESSEE COULD CL AIM EXEMPTION U/S 11(1)(A) IN RESPECT OF THE AMOUNT APPLI ED BY IT FOR PURCHASING A BUILDING FOR HOSPITAL PURPOSES. (VII) CIT VS. MUNISUVRAT JAIN TEMPLE TRUST (1994) TAX LR 1084 (BOMBAY) IN THIS CASE, IT HAS BEEN LAID DOWN THAT THE INCOME O F A CHARITABLE TRUST WAS LIABLE TO BE COMPUTED IN NORMAL COMMERCIAL MANNER ALTHOUGH THE TRUST MIGHT NOT BE CARRYING ON A NY BUSINESS AND THE ASSETS IN RESPECT WHERE OF THE DPRECIATION WAS CLA IMED MIGHT NOT BE BUSINESS ASSETS. (VIII) CIT VS. MARKET COMMITTEE, PIPLI (AY.2005-06) 330 ITR 16 (P&H) IN THIS CASE, IT HAS BEEN LAID DOWN THAT THE DEPRECIAT ION IS ALLOWABLE ON CAPITAL ASSETS FROM THE INCOME OF CHARITA BLE TRUST FOR DETERMINING THE QUANTUM OF THE FUNDS WHICH HAVE TO B E APPLIED FOR THE PURPOSES OF THE TRUST IN TERMS OF SECTION 11 AND IT CANN OT BE SAID THAT DOUBLE BENEFIT IS GIVEN IN ALLOWING THE DEPRECIATION . IN THIS CASE, THE HON'BLE COURT HAS CONSIDERED AND DISTINGUISHED THE DECI SION IN THE CASE OF ESCORTS LTD. & ORS. VS. UNION OF INDIA (1993) 19 9 ITR 43 (SC). (IX) CIT VS. VISHWA JAGRITI MISSION (AY.2006-07) 73 DT R 195 (DELHI) IN THIS CASE, IT HAS BEEN LAID DOWN THAT DEPRECIATION' ON ASSETS UTILIZED FOR THE CHARITABLE PURPOSES IS TO BE ALLOWED IN COMPUTING INCOME OF THE CHARITABLE TRUST ON COMMERCIAL PRINCIP LE. IN THIS CASE, THE HON'BLE COURT HAS CONSIDERED AND DISTINGUISHED THE DECI SION IN THE CASE OF ESCORTS LTD. & ORS, VS. UNION OF INDIA (1993) 19 9 ITR 43 (SC). 7.1 THE A.O. HAS RELIED ON THE DECISION OF ESCORTS LTD . & ORS, VS. UNION OF INDIA (1993) 199 ITR 43 (SC). IN THIS CASE, IT HAS BEEN LAID DOWN THAT AMENDMENT OF CLAUSE (IV) TO SUB SECTION (2) OF SECTION 35 MADE BY FINANCE (NO.2) ACT, 1980 WAS MERELY CLARIFICATORY IN NATURE; ONCE DEDUCTION U/S 35(2)(IV) WAS ALLOWED, DEPRECIATION U/S 32 WAS NOT AVAILABLE QUA SAME EXPENDITURE EITHER IN THE SAME OR ANY OTHER PREVIOUS YEAR EVEN UNDER PRE-AMENDED PROVISIONS; THE ALLOWANCE OF DEPRECIATION WILL AMOUNT TO DOUBLE DEDUCTION. 7.2 NOW I PROCEED TO DEAL WITH THE CONTENTION RAISE D BY THE A.O. MENTIONED IN EARLIER PARAGRAPH. THE FIRST CONTENTIONS RAISED BY THE AO. IS THAT THE ALL OWANCE OF DEPRECIATION IN ADDITION TO THE ALLOWANCE OF DEDUCT ION OF COST OF ASSET AS APPLICATION OF INCOME IN EARLIER YEAR SHALL AMOUNT T O DOUBLE DEDUCTION WHICH IS NOT PERMISSIBLE UNDER THE ACT AS LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. & ORS. VS. UNION OF IN DIA (1993) 199 ITR 43 (SC). IN THIS REGARD, IT HAS BEEN NOTICED THAT THE DECISION RELIED ON BY THE AO. IS IN RESPECT OF DEDUCTION OF COST OF AN ASSET U /S 35 ALLOWED AS DEDUCTION FOR CAPITAL EXPENDITURE INCURRED ON SCIENT IFIC RESEARCH AND FURTHER ALLOWANCE OF DEPRECIATION ON THE SAME ASSET WH EREAS IN THE CASE UNDER APPEAL, THE APPELLANT IS A TRUST AND HAS CLAIMED COST OF THE ASSET AS APPLICATION OF INCOME U/S 11 AND DEPRECIATION HAS BEE N CLAIMED IN SUBSEQUENT YEAR ON COMMERCIAL PRINCIPLES. THE ABOVE ISSUE HAS BEEN CONSIDERED BY HON'BLE DELHI H IGH COURT IN THE CASE OF CIT VS. VISHWA JAGRITI MISSION (A.Y.2006- 07) 73 DTR 195. THE RELEVANT PORTION OF THE DECISION IN PARA-13 IS RE PRODUCED BELOW '13. THE JUDGMENT OF THE SUPREME COURT IN ESCORTS L IMITED VS. UNION OF INDIA (SUPRA) HAS BEEN RIGHTLY HELD TO BE INAPPLICABLE TO THE PRESENT CASE. THERE ARE TWO REASONS AS TO WHY THE JUDGMENT CANNOT BE APPLIED TO THE PRESENT CASE. FIRSTLY, THE SUPREME COURT WAS NOT CONCERNED WITH THE CASE OF A CHARITABLE TRU ST/INSTITUTION INVOLVING THE QUESTION AS TO WHETHER ITS INCOME SHO ULD BE COMPUTED ON COMMERCIAL PRINCIPLES IN ORDER TO DETERMINE THE AMOUNT OF INCOME AVAILABLE FOR APPLICATION TO CHARITABLE PURPOSES. IT WAS A CASE WHERE THE ASSESSEE WAS CARRYING ON BUSINESS AN D THE STATUTORY COMPUTATION PROVISIONS OF CHAPTER IV-D OF THE ACT WERE APPLICABLE. IN THE PRESENT CASE, WE ARE NOT CONCERNED WITH THE APPLICABILITY OF THESE PROVISIONS. WE ARE CONCERNED ONLY WITH THE CO NCEPT OF COMMERCIAL INCOME AS UNDERSTOOD FROM THE ACCOUNTING POINT OF VIEW. EVEN UNDER NORMAL COMMERCIAL ACCOUNTING PRINC IPLES, THERE IS AUTHORITY FOR THE PROPOSITION THAT DEPRECIATION IS A NECESSARY CHARGE IN COMPUTING THE NET INCOME. SECONDLY, THE S UPREME COURT WAS CONCERNED WITH THE CASE WHERE THE ASSESSEE HAD CLAIMED DEDUCTION OF THE COST OF THE ASSET UNDER SECTION 35 (1) OF THE ACT, WHICH ALLOWED DEDUCTION FOR CAPITAL EXPENDITURE INC URRED ON SCIENTIFIC RESEARCH. THE QUESTION WAS WHETHER AFTER CLAIMING DEDUCTION IN RESPECT OF THE COST OF THE ASSET UNDER SECTION 35(1), CAN THE ASSESSEE AGAIN CLAIM DEDUCTION ON ACCOUNT OF DE PRECIATION IN RESPECT OF THE SAME ASSET. THE SUPREME COURT RULED THAT, UNDER GENERAL PRINCIPLES OF TAXATION, DOUBLE DEDUCTION IN REGARD TO THE. SAME BUSINESS OUTGOING IS NOT INTENDED UNLESS: CLEA RLY EXPRESSED. THE PRESENT CASE IS NOT ONE OF THIS TYPE, AS RIGHTL Y DISTINGUISHED BY THE CIT(APPEALS). 2 ITA NO.1758/PN/2014 FURTHER, THE ABOVE ISSUE HAS ALSO BEEN CONSIDERED BY HON 'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MA RKET COMMITTEE, PIPLI (A.Y.2005-06) 330 ITR 16. THE RELE VANT PORTION OF THE DECISION IN PARA-8 & 9 IS REPRODUCED BELOW 8. IN ALL FAIRNESS TO THE LEARNED COUNSEL FOR THE REVENUE, REFERENCE IS MADE TO THE JUDGMENT OF THE H ONBLE APEX COURT IN ESCORTS LIMITEDS CASE [1993J 199 ITR 43 (SC), ON WHICH RELIANCE HAS BEEN PLACED BY THE LEARNED COUNSEL FOR THE REVENUE. THE HON'BLE SUPREME COURT IN THAT CASE WAS DEALING WITH A CASE RELATING TO TWO DEDUCTIONS BOTH UNDER SECTIONS 10(2 )(VI) AND 10(2)(XIV) OF THE 1922 ACT OR BOTH UNDER SECTIONS 32(1)(II) AND 35(1)(IV) OF THE ACT. THE ASSESSEE THEREIN HAD INCU RRED EXPENDITURE OF A CAPITAL NATURE ON SCIENTIFIC RESEARCH RELATING TO THE BUSINESS WHICH RESULTED INTO ACQUISITION OF AN ASSET. THE AS SESSEE HAD SOUGHT TO CLAIM A SPECIFIED PERCENTAGE OF THE WRITTEN DOWN VALUE OF THE ASSET AS DEPRECIATION AND AT THE SAME TIME CLAIMED DEDUCTION, IN FIVE CONSECUTIVE YEARS OF THE EXPENDITURE INCURRED ON THE ACQUISITION OF THE ASSET. THE APEX COURT OBSERVED ( HEADNOTE) : 'WHERE A CAPITAL ASSET USED FOR SCIENTIFIC RESEARCH RELATED TO THE BUSINESS OF THE ASSESSEE IS ALSO IPSO - FACTO AN ASSET USED FOR THE PURPOSE OF THE BUSINESS, IT IS IMPOSSIBLE TO CONCEI VE OF THE LEGISLATURE HAVING ENVISAGED A DOUBLE DEDUCTION IN RESPECT OF THE SAME EXPENDITURE, ONE BY WAY OF DEPRECIATION UNDER SECTION 32 OF THE INCOME-TAX ACT, 1961 AND OTHER BY WAY OF ALLOWANCE UNDER SECTION 35(1)(IV) OF A PART OF THE CAPITAL EXPENDIT URE ON SCIENTIFIC RESEARCH, EVEN THOUGH THE TWO HEADS OF DEDUCTION DO NOT COMPLETELY OVERLAP AND THERE IS SOME DIFFERENCE IN THE RATIONALE OF THE TWO DEDUCTIONS .. ' 9. IT WAS FURTHER RECORDED THAT (HEAD NOTE) : 'THERE IS A FUNDAMENTAL, THOUGH UNWRITTEN, AXIOM THAT NO LEGISLATURE COULD HAVE AT ALL INTENDED A DOUBLE DED UCTION IN REGARD TO THE SAME BUSINESS OUTGOING; AND, IF IT IS INTEND ED, IT WILL BE CLEARLY EXPRESSED. IN OTHER WORDS, IN THE ABSENCE O F CLEAR STATUTORY INDICATION TO THE CONTRARY, THE STATUTE SHOULD NOT BE READ SO AS TO PERMIT AN ASSESSEE TWO DEDUCTIONS . ' IN VIEW OF THE ABOVE DECISIONS OF HON'BLE DELHI & PUN JAB & HARYANA HIGH COURTS, IT IS EVIDENT THAT THE RATIO LAI D DOWN BY HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. & OR S, VS. UNION OF INDIA (1993) 199 ITR 43 IS NOT APPLICABLE T O THE CASE OF THE APPELLANT TRUST AND THE DEPRECIATION CLAIMED BY THE APPELLANT IS ALLOWABLE DEDUCTION U/S 11 OF THE ACT. THE FIRST CO NTENTION RAISED BY THE A.O. IS REJECTED. THE SECOND CONTENTION RAISED BY THE A.O. IS THAT THE DECISIONS RELIED ON BY THE APPELLANT ARE NOT ACCEPTAB LE AND CANNOT BE RELIED ON AS IN THE SAID DECISIONS THE RATIO LAID DOWN BY THE DECISION IN THE CASE OF ESCORTS LTD. & ORS. VS. UNION OF INDIA (1993) 199 ITR 43 (SC) HAS NOT BEEN CONSIDERED. FROM THE PRECEDING PARAGRAPH IT CAN BE NOTED THAT IN THE ABO VE MENTIONED TWO DECISIONS IN THE CASES OF CIT VS. VISHWA JAGRITI MISS ION (A.Y.2006-07) 73 DTR 195 (P&H) AND CIT VS. MARKET CO MMITTEE, PIPLI (AY.2005-06) 330 ITR 16 (DELHI), THE DECISION IN THE CASE OF 3 ITA NO.1758/PN/2014 ESCORTS LTD. & ORS. VS. UNION OF INDIA (1993) 199 ITR 4 3 (SC) HAS BEEN CONSIDERED AND HELD TO BE NOT APPLICABLE TO THE CASES OF THE CHARITABLE TRUST. THE SECOND CONTENTION RAISED BY THE AO. IS REJECTED. THE THIRD CONTENTION RAISED BY THE AO. IS THAT THE LA W IN THIS REGARD HAS BEEN CHANGED W.E.F. 01/04/1989 IN VIE W OF INSERTION OF CLAUSE (D) IN SUB-SECTION (1) OF SECTION-11 BY DIRECT TAX LAWS (AMENDMENT) ACT, 1989. IN VIEW OF THE ABOVE AMENDMENT, THE AMOUNT RECEIVED BY THE TRUST TOWARDS CORPUS IS EXEMPT AND HENCE THE INVESTMENT OUT OF SUCH CORPUS IS A LSO NOT ALLOWABLE AS APPLICATION FOR THE PURPOSE OF THE TRUST; IN SUCH CASE, THE DEPRECIATION IS ALLOWABLE AS THE SAME WILL NOT AMO UNT TO DOUBLE DEDUCTION. IN THIS REGARD, IT HAS BEEN NOTICED THAT THE SAID SECTION 11(1)(D) IS IN RESPECT OF EXEMPTION PROVIDED I N RESPECT OF VOLUNTARY CONTRIBUTION RECEIVED BY THE TRUST WITH TH E SPECIFIC DIRECTION THAT IT SHALL FORM PART OF THE CORPUS OF TH E TRUST AND HENCE NOT INCLUDIBLE IN THE TOTAL INCOME. WHEREAS TH E ALLOWABILITY OF DEDUCTION IN RESPECT OF DEPRECIATION IS AS PER PR OVISIONS OF SECTION 11(1)(A) OF THE ACT. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE INSERTION OF SECTION 11(1)(D) HAS NOT CH ANGED THE LEGAL POSITION ON THE ISSUE UNDER APPEAL. FURTHER, TH E ASSESSMENT YEARS INVOLVED IN THE ABOVE MENTIONED DECISIONS RELIED ON BY THE APPELLANT IN THE CASES OF CIT VS. VISHWA JAGRITI MISSION (AY.2006- 07) 73 DTR 195 (P&H) AND CIT VS. MARKET COMMITTEE, P IPLI (AY.2005-06) 330 ITR 16 (DELHI) ARE AY.2006-07 & 20 05-06 WHICH ARE AFTER THE INSERTION OF SECTION 11(1)(D) W.E .F. 01/04/1989. IN VIEW OF THE ABOVE FACTS, THE THIRD CO NTENTION RAISED BY THE A.O. IS ALSO REJECTED. IT HAS ALSO BEEN NOTICED THAT RECENTLY THE HON'BLE KE RALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTION VS. CIT (2013) 76 DTR 372 HAS HELD THAT DEPRECIATION ON THE ASSETS OF A CHARITABLE TRUST IS NOT ALLOWABLE AS THE COST OF ASSET IS ALLOWABLE AS APPLICATION OF INCOME. IN SUPPORT OF THE ABOVE PRO POSITION, THE HON'BLE KERALA HIGH COURT HAS RELIED ON THE DECISION IN THE CASE OF ESCORTS LTD. & ORS. VS. UNION OF INDIA (1993) 199 ITR 4 3 (SC). THE CONTENTION RAISED BY THE A.O, IS SUPPORTED BY THE ABOV E REFERRED DECISION OF HON'BLE KERALA HIGH COURT WHEREAS THE CON TENTION OF THE APPELLANT IS SUPPORTED BY THE DECISIONS OF HON'BLE BOMBAY HIGH COURT, KARNATAKA HIGH COURT, GUJARAT HIGH COUR T, MADHYA PRADESH HIGH COURT, PUNJAB & HARYANA HIGH COURT AND DELHI HIGH COURT. IT IS SETTLED LAW THAT WHERE TWO VIEWS ARE POSSIB LE AND WHERE DIFFERENT DECISIONS OF SEPARATE HIGH COURTS ARE A VAILABLE THEN THE DECISION OF THE COURT IN FAVOUR OF THE ASSESSEE IS TO BE FOLLOWED. THIS PROPOSITION OF LAW IS SUPPORTED BY FOLLO WING DECISIONS I. CIT VS. VEGETABLE PRODUCTS LTD. (1973) 85 ITR 192 (SC ) II. CIT VS. PODAR CEMENT (P) LTD. ETC (1997) 141 CTR 67 (SC) III. CIT VS. SHAAN FINANCE (P) LTD. (1998) 146 CTR 110 (S C) FURTHER, THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IS IN FAVOUR OF THE APPELLANT. 4 ITA NO.1758/PN/2014 IN VIEW OF THE ABOVE FACTS AND DISCUSSION AND RESPECTFUL LY FOLLOWING THE RATIO LAID DOWN BY THE ABOVE REFERRED DECISIONS I HOLD THAT THE APPELLANT TRUST IS ELIGIBLE FOR DEDUCTI ON IN RESPECT OF DEPRECIATION AMOUNTING TO RS.2,46,56,825/-. THE ADDI TION OF RS.2,46,56,825/- IS DELETED. THE A.O. IS DIRECTED ACCO RDINGLY. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 8. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET FILED A COPY OF THE DECISION OF THE TRIBUNAL IN THE CASE OF DCIT VS. SANJEE VAN VIDYALAYA TRUST VIDE ITA NO.692/PN/2010 ORDER DATED 27- 09-2011 FOR A.Y. 2005-06 AND SUBMITTED THAT THE TRIBUNAL AFTER CO NSIDERING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD. AND OTHERS (SUPRA) AND FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF DIT(E) VS.FRAMJEE CAWASJEE INSTITU TE (SUPRA) HAS ALLOWED THE CLAIM OF DEPRECIATION WHERE THE COST OF A CQUISITION OF THE ASSET HAS BEEN CLAIMED AND ALLOWED AS AN APPLICATION O F INCOME FOR CHARITABLE PURPOSE IN THE PAST YEARS. THEREFORE, THIS BEING A COVERED MATTER THE GROUNDS RAISED BY THE REVENUE SHO ULD BE DISMISSED. 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND FAIRLY SUBMITTED THAT THE ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF DCIT VS. SANJEE VAN VIDYALAYA TRUST (SUPRA). 10. AFTER HEARING BOTH THE SIDES, WE FIND THE AO IN THE INS TANT CASE DISALLOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT TH E COST OF ASSET HAS ALREADY BEEN ALLOWED AS APPLICATION OF INCOME IN P AST ASSESSMENT YEARS AND ALLOWANCE OF DEPRECIATION ON THE S AME WILL AMOUNT TO DOUBLE DEDUCTION. FOR THE ABOVE PROPOSITION, THE AO 5 ITA NO.1758/PN/2014 RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF ESCORTS LTD. AND OTHERS (SUPRA). WE FIND THE LD.CIT(A) RELY ING ON VARIOUS DECISIONS ALLOWED THE CLAIM OF DEPRECIATION AND HIS OBSERVATION HAS ALREADY BEEN REPRODUCED IN THE PRECEDIN G PARAGRAPHS. 11. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBU NAL IN THE CASE OF DCIT VS. SANJEEVAN VIDYALAYA TRUST (SUPRA) WH EREIN THE TRIBUNAL AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD. AND OTHERS (SUPRA) AND FOLLOWING T HE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF D CIT FRAMJEE CAWASJEE INSTITUTE (SUPRA) HAS ALLOWED THE CLAIM OF DEPRECIATION IN CASE OF RELEVANT ASSET WHICH HAS ALREADY BEEN ALLOWED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES. THE RELEVA NT OBSERVATION OF THE TRIBUNAL FROM PARA 4 ONWARDS READ AS UNDER : 4. IN BRIEF, THE FACTS ARE THAT THE RESPONDENT-ASSESSEE IS A TRUST WHICH IS RUNNING EDUCATIONAL INSTITUTIONS AND IS REGIST ERED UNDER SECTION 12A(A) OF THE ACT WITH THE COMMISSIONER OF INCOME-TAX . WHILE FINALISING THE ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSE E HAD CLAIMED DEPRECIATION OF RS 59,44,712/- ON ASSETS WHOSE C OST HAD BEEN TREATED AS APPLICATION OF INCOME IN THE PAST YEARS. AS PER THE ASSESSING OFFICER, SUCH DEPRECIATION CLAIM WAS NOT ALLOWABLE, SI NCE 100% OF THE CORRESPONDING CAPITAL EXPENDITURE WAS ALREADY ALLOWED AS APPLICATION OF INCOME TO THE ASSESSEE IN EARLIER YEAR. THEREFORE, THE ASSESSEE'S CLAIM OF DEPRECIATION OF RS 59,44,712/- WAS DISALLOWED. 5. IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX ( APPEALS), THE ASSESSEE JUSTIFIED THE CLAIM, INTER ALIA, BY RELYING UPO N THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF DIT(E) V FRAMJEE CAWASJEE INSTITUTE 109 CTR 463 (BOM). THE COMMISSIONER OF INCOM E-TAX (APPEALS) RELYING UPON THE AFORESAID DECISION OF THE J URISDICTIONAL HIGH COURT ALLOWED THE CLAIM OF THE ASSESSEE FOR DEPRECIATIO N. AGAINST THE AFORESAID, REVENUE IS IN APPEAL BEFORE US. 6. AS NOTED EARLIER, THE ONLY PLEA AGITATED BEFORE US BY THE REVENUE IS BASED ON THE PROPOSITION THAT THE ALLOWANCE OF DEPR ECIATION WOULD RESULT IN DOUBLE DEDUCTION, SINCE IN THE PAST YEARS THE CAPITAL EXPENDITURE ON THE RELEVANT ASSET HAS ALREADY BEEN ALL OWED AS APPLICATION OF INCOME. IN RESPONSE TO SUCH PLEA, THE L EARNED COUNSEL, APPEARING FOR THE RESPONDENT-ASSESSEE, POINTED OUT THAT SIMILAR ARGUMENT FROM THE SIDE OF THE REVENUE WAS CONSIDERED B Y THE HON'BLE 6 ITA NO.1758/PN/2014 BOMBAY HIGH COURT IN THE CASE OF CIT V INSTITUTE OF B ANKING 264 ITR 110 (BOM) WHEREIN THE ISSUE WAS DECIDED IN FAVOUR OF THE A SSESSEE, FOLLOWING THE EARLIER JUDGMENT IN THE CASE OF FRAMJEE CAWASJEE INSTITUTE (SUPRA). MOREOVER, THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V SHRI AGMODHARAK DEVARDHI JAIN AGAM MANDIT TRUST VIDE ITA NO 1526/PN/07 HAS FOLLOWED THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING (SUPRA) IN UPHOLDING THE STAN D SIMILAR TO THAT OF THE ASSESSEE. 7. IN THIS BACKGROUND, WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FIND OURSELVES UNABLE TO UPHOLD THE STAND CANVASSED BY T HE REVENUE, INASMUCH AS THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS DECIDED THE ISSUE FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTI ONAL HIGH COURT IN THE CASE OF FRAMJEE CAWASJEE INSTITUTE (SUPRA) WHICH HA S BEEN SUBSEQUENTLY FOLLOWED BY THE HON'BLE HIGH COURT IN TH E CASE OF INSTITUTE OF BANKING (SUPRA). AS PER THE HON'BLE HIGH COURT, ME RELY BECAUSE THE COST OF ACQUISITION OF AN ASSET HAS BEEN CLAIMED AS AN AP PLICATION OF INCOME FOR CHARITABLE PURPOSES IN THE PAST YEARS, THE A SSESSEE COULD NOT BE DENIED DEPRECIATION IN RESPECT OF SUCH ASSETS IN A SUB SEQUENT YEAR. 8. IN SO FAR AS THE RELIANCE PLACED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IN THE CASE OF ESCORTS LTD. (SUPRA) IS CON CERNED, THE SAME, IN OUR VIEW, DOES NOT HELP THE CASE OF THE REVENUE. T HE HONBLE HIGH COURT OF PUNJAB & HARYANA IN ITS DECISION IN THE CASE OF CIT, KARNAL V. MARKET COMMITTEE , VIDE ITA NO 535/09 DATED 5.7.2010 CONSIDERED AN IDENTICAL ISSUE AND ALSO DEALT WITH THE PLEA OF THE RE VENUE BASED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. (SUPRA). AS PER THE HON'BLE PUNJAB & HARYANA HIGH COU RT, THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LT D. (SUPRA) WAS DISTINGUISHABLE, INASMUCH AS THERE WAS NO CASE OF THE ASSESSE E CLAIMING DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION. FOLLOW ING THE AFORESAID JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT , WE, THEREFORE, FIND NO MERIT IN THE PLEA RAISED BY THE REVENUE BASED ON THE JUDGMENT IN THE CASE OF ESCORTS LTD. (SUPRA). 9. IN THE RESULT, FOLLOWING THE JUDGMENT OF THE HON 'BLE JURISDICTIONAL HIGH COURT, WE HEREBY AFFIRM THE ORDER OF THE COMMI SSIONER OF INCOME- TAX (APPEALS). 12. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL IN THE CASE OF SANJEEVA N VIDYALAYA TRUST (SUPRA), THEREFORE, IN ABSENCE OF ANY CONTRARY MATE RIAL BROUGHT TO OUR NOTICE AGAINST THE SAID OF THE TRIBUNAL, WE FIND NO IN FIRMITY IN THE ORDER OF CIT(A) ALLOWING THE CLAIM OF DEPRECIATION ON ASSE T, THE COST OF WHICH HAS ALREADY BEEN ALLOWED AS APPLICATION OF INC OME FOR CHARITABLE PURPOSES. ACCORDINGLY, THE ORDER OF CIT(A) IS U PHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7 ITA NO.1758/PN/2014 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05-10-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ' DATED : 05 TH OCTOBER, 2016. ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. THE CIT(A ), AURANGABAD THE CIT, AURANGABAD 5. $ ''( , ( , / DR, ITAT, A PUNE; 5 . + / GUARD FILE. / BY ORDER, // $ ' //TRUE COPY // -. ' ( / SR. PRIVATE SECRETARY ( , / ITAT, PUNE