Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 3135 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
13-06-2016
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
SMC
Assessment Year
2008-2009
Appeal Filed On
13-01-2016
Judgement Text
, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.205/MUM/2016 ASSESSMENT YEAR: 2008-09 DCIT(EXEMPTION)-2(1), 5 TH FLOOR, PIRAMAL CHAMBER, LALBAUG, PAREL, MUMBAI-400012 / VS. SOCIETY OF THE SERVANT OF THE HOLY SPIRIT, HOLY SPIRIT HOSPITAL, MAHAKALI CAVES ROAD, ANDHERI (E), MUMBAI-400092 PAN. NO. AAAAS0148J ( / REVENUE ) ( !' # /ASSESSEE) / REVENUE BY SMT. N.V. NADKARNI-DR !' # / ASSESSEE BY NONE $ % & # ' / DATE OF HEARING : 13/06/2016 & # ' / DATE OF ORDER: 13/06/2016 ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 13/11/2015 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. 2. DURING HEARING OF THIS APPEAL, NOBODY REPRESEN TED THE ASSESSEE, IN SPITE OF ISSUANCE OF REGISTERED AD NOTICE, THEREFORE, WE HAVE NO OPTION BUT TO PROCEED EX-PART E, QUA THE ASSESSEE, AND TEND TO DISPOSE OF THIS APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. ON THE OTHER HAND, T HE LD. DR, SMT. N.V. NADKARNI, DEFENDED THE CONCLUSION ARRIVED AT IN THE ASSESSMENT ORDER BY CONTENDED THAT THE IMPUGNED IS SUE IS COVERED BY THE DECISION FROM HONBLE APEX COURT IN ESCORTS LTD. (199 ITR 43)(SC). 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE F ACTS, IN BRIEF, ARE THAT THE ASSESSEE TRUST IS REGISTERED U/ S 12A OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), DECLARE D INCOME OF RS.66,733/- IN ITS RETURN FILED ON 29/09/2008 AN NEXED WITH INCOME AND EXPENDITURE ACCOUNT, AUDITED BALANC E SHEET. THE LD. ASSESSING OFFICER COMPLETED THE ASSESSMENT VIDE ORDER 15/12/2010 U/S 143(3) OF THE ACT TAXING THE INCOME AND DISALLOWING THE CLAIM OF DEPRECIATION. ON APPEAL, B EFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THE CLAIM OF THE ASSESSEE WAS ALLOWED AGAINST WHICH THE REVENUE IS I N APPEAL BEFORE THIS TRIBUNAL. ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 3 2.2. THE SUM AND SUBSTANCE OF THE GROUND RAISED BY THE REVENUE IS WITH RESPECT TO ALLOWING THE CLAIM O F DEPRECIATION, RELYING UPON THE DECISION FROM HONBL E JURISDICTIONAL HIGH COURT IGNORING THE DECISION FRO M HONBLE APEX COURT (SUPRA). WE FIND THAT HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS INSTITUTE OF BANKING PE RSONAL (264 ITR 110) (BOM.) AND HONBLE GUJARAT HIGH COURT IN C IT VS PLOT SWETAMBER MURTI PUJAK MANDAL (211 ITR 293)(GUJ ARAT) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. BEFORE COMING TO ANY CONCLUSION AND THE FACTS AVAILABLE ON RECORD, W E FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F INSTITUTE OF BANKING PERSONAL (SUPRA) HELD AS UNDER:- THIS REFERENCE IS MADE AT THE INSTANCE OF THE REVE NUE UNDER SECTION 256(1) OF THE INCOME-TAX ACT, 1961, U NDER WHICH THE FOLLOWING THREE QUESTIONS HAVE BEEN REFER RED TO US FOR OUR OPINION: '1 WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE TRIBUNAL WAS RIGHT IN LAW IN DIRECTING TH E ASSESSING OFFICER TO ALLOW DEPRECIATION ON THE ASSE TS THE COST OF WHICH HAS BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTION 11 IN THE PAST YEARS? 2 WITHOUT PREJUDICE TO THE GROUND NO 1, WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRI BUNAL WAS JUSTIFIED IN LAW IN DIRECTING THE ASSESSING OFF ICER TO ALLOW DEPRECIATION OF RS 49,453 ON ASSETS RECEIVED ON TRANSFER, WHEN THE ASSESSEE HAD NOT INCURRED THE CO ST OF ACQUIRING THE ASSETS? 3 WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN ALLOWING THE ASSESSEE TO CARRY FORWARD THE DEFICIT OF EARLIER YE AR AND SET IT OFF AGAINST THE SURPLUS OF SUBSEQUENT YEARS WHEN THE SAME WAS NOT ALLOWABLE IN THE CASE OF THE ASSES SEE- TRUST IN WHOSE CASE INCOME EXEMPTED UNDER SECTION 1 1 OF THE INCOME-TAX ACT, 1961?' FACTS: ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 4 THE ASSESSEE IS A CHARITABLE TRUST FOR THE ACCOUNTI NG YEAR ENDING DECEMBER 31, 1984 (ASSESSMENT YEAR 1984-85) A RETURN OF INCOME WAS FILED ON JUNE 28, 1985, BY THE ASSESSEE DECLARING A DEFICIT OF RS 7497 LAKHS IN TH E REVISED RETURN FILED BY THE ASSESSEE ON APRIL 3, 19 86, THE DEFICIT WAS INCREASED TO RS 8918 LAKHS THIS REVISIO N OF ACCOUNTS WAS AUTHORISED BY THE BOMBAY PUBLIC TRUST REGISTRATION OFFICE THE ASSESSEE IS A CHARITABLE TR UST REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT IT IS ALSO REGISTERED UNDER SECTION 12A OF THE INCOME-TAX ACT THE ASSESSEE-INSTITUTE IS GOVERNED BY A BOARD CONSISTIN G OF EXECUTIVE OFFICERS OF RBI, CENTRAL RECRUITMENT BOAR D, BANKING SERVICES RECRUITMENT BOARD, ETC THE OBJECT OF THE ASSESSEE IS CHARITABLE IN NATURE THE INCOME OF THE ASSESSEE IS EXEMPT UNDER SECTION 11 OF THE INCOME-T AX ACT THE ASSESSEE HAD CLAIMED DEPRECIATION WHICH WAS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THA T CAPITAL EXPENDITURE INCURRED DURING THE ACCOUNTING YEAR WAS ALLOWED AS A DEDUCTION FROM THE INCOME OF THE ASSESSEE AND, THEREFORE, THE CLAIM OF THE ASSESSEE FOR DEPRECIATION ON BUILDINGS WAS DISALLOWED FURTHER, THE ASSESSEE HAD CLAIMED DEPRECIATION ON FURNITURE AND FIXTURES TO THE TUNE OF RS 49,453 AT 10 PER CENT OF THE WRITTEN DOWN VALUE WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAID A SSETS HAVE BEEN RECEIVED BY THE ASSESSEE ON TRANSFER FROM_NATIONAL INSTITUTE OF BANK MANAGEMENT THAT INSTITUTE WAS ALSO A CHARITABLE TRUST ITS INCOME WA S ALSO EXEMPT UNDER SECTION 11 OF THE INCOME-TAX ACT THE ASSESSING OFFICER DID NOT ALLOW DEPRECIATION ON FIX TURES AND FURNITURES ON THE GROUND THAT FULL DEDUCTION HA D BEEN ALLOWED IN RESPECT OF CAPITAL COST OF FURNITURE AND FIXTURES AND IF THE DEPRECIATION IS ALLOWED, AS CLAIMED BY T HE ASSESSEE, IT WOULD RESULT IN DOUBLE DEDUCTION FURTHER, DURING THE ASSESSMENT YEAR IN QUESTION THE ASSESSEE HAD CARRIED FORWARD THE DEFICIT OF THE EAR LIER YEARS AND HAD ADJUSTED THE DEFICIT OF THE EARLIER Y EARS AGAINST THE SURPLUS OF THE SUBSEQUENT YEARS WHICH W AS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND T HAT SUCH CARRY FORWARD WAS APPLICABLE ONLY TO INCOME ASSESSABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUS INESS' AND SUCH CARRY FORWARD AND ADJUSTMENT WAS NOT PERMISSIBLE IN CASE OF INCOME ASSESSABLE UNDER SECT ION 11 TO SECTION 13 OF THE INCOME-TAX ACT AS THE INCOME O F THE CHARITABLE TRUST WAS NOT ASSESSABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS' ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 5 THEREFORE, THE ASSESSEE CARRIED THE MATTER IN APPEA L ON ALL THE THREE POINTS WHICH ARE INTERRELATED TO THE APPELLATE AUTHORITY WHICH DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE THE DECISION OF THE APPELLATE AUTHORITY WA S CONFIRMED BY THE TRIBUNAL HENCE, THIS REFERENCE HAS COME BEFORE THE COURT AT THE INSTANCE OF THE DEPARTMENT FINDINGS: AS STATED ABOVE, THE FIRST QUESTION WHICH REQUIRES CONSIDERATION BY THIS COURT IS: WHETHER DEPRECIATIO N WAS ALLOWABLE ON THE ASSETS, THE COST OF WHICH HAS BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTION 11 I N THE PAST YEARS? IN THE CASE OF CIT V MUNISUVRAT JAIN [1 994] TAX LR 1084 (BOM), THE FACTS WERE AS FOLLOWS: THE ASSESSEE WAS A CHARITABLE TRUST IT WAS REGISTERED A S A PUBLIC CHARITABLE TRUST IT WAS ALSO REGISTERED WITH THE COMMISSIONER OF INCOME-TAX, PUNE THE ASSESSEE DERIV ED INCOME FROM TEMPLE PROPERTY WHICH WAS A TRUST PROPE RTY DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEARS 1977-78, 1978-79 AND 1979-80, THE ASSESSEE CLAIMED DEPRECIATION ON THE VALUE OF THE B UILDING AT 2 1/2 PER CENT AND THEY ALSO CLAIMED DEPRECIATIO N ON FURNITURE AT 5 PER CENT THE QUESTION WHICH AROSE BE FORE THE COURT FOR DETERMINATION WAS: WHETHER DEPRECIATI ON COULD BE DENIED TO THE ASSESSEE, AS EXPENDITURE ON ACQUISITION OF THE ASSETS HAD BEEN TREATED AS APPLI CATION OF INCOME IN THE YEAR OF ACQUISITION? IT WAS HELD B Y THE BOMBAY HIGH COURT THAT SECTION 11 OF THE INCOME-TAX ACT MAKES A PROVISION IN RESPECT OF COMPUTATION OF INCO ME OF THE TRUST FROM PROPERTY HELD FOR CHARITABLE OR RELI GIOUS PURPOSES AND IT ALSO PROVIDES FOR APPLICATION AND ACCUMULATION OF INCOME ON THE OTHER HAND, SECTION 2 8 OF THE INCOME-TAX ACT DEALS WITH CHARGEABILITY OF INCO ME FROM PROFITS AND GAINS OF BUSINESS AND SECTION 29 P ROVIDES THAT INCOME FROM PROFITS AND GAINS OF BUSINESS SHAL L BE COMPUTED IN ACCORDANCE WITH SECTION 30 TO SECTION 4 3C THAT, SECTION 32(1) OF THE ACT PROVIDES FOR DEPRECI ATION 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 THA T 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 OF THE INCOME-TAX ACT AND NOT UNDER GENE RAL PRINCIPLES THE COURT REJECTED THIS ARGUMENT IT WAS HELD THAT NORMAL DEPRECIATION CAN BE CONSIDERED AS A LEGITIMATE DEDUCTION IN COMPUTING THE REAL INCOME O F THE ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 6 ASSESSEE ON GENERAL PRINCIPLES OR UNDER SECTION 11( 1)(A) OF THE INCOME-TAX ACT THE COURT REJECTED THE ARGUME NT ON BEHALF OF THE REVENUE THAT SECTION 32 OF THE INCOME -TAX ACT WAS THE ONLY SECTION GRANTING BENEFIT OF DEDUCT ION ON ACCOUNT OF DEPRECIATION IT WAS HELD THAT INCOME OF A CHARITABLE TRUST DERIVED FROM BUILDING, PLANT AND MACHINERY AND FURNITURE WAS LIABLE TO BE COMPUTED I N A NORMAL COMMERCIAL MANNER ALTHOUGH THE TRUST MAY NOT BE CARRYING ON ANY BUSINESS AND THE ASSETS IN RESPECT WHEREOF DEPRECIATION IS CLAIMED MAY NOT BE BUSINESS ASSETS IN ALL SUCH CASES, SECTION 32 OF THE INCOME- TAX ACT PROVIDING FOR DEPRECIATION FOR COMPUTATION OF INCOM E DERIVED FROM BUSINESS OR PROFESSION IS NOT APPLICAB LE HOWEVER, THE INCOME OF THE TRUST IS REQUIRED TO BE COMPUTED UNDER SECTION 11 ON COMMERCIAL PRINCIPLES AFTER PROVIDING FOR ALLOWANCE FOR NORMAL DEPRECIATION AND DEDUCTION THEREOF FROM GROSS INCOME OF THE TRUST IN VIEW OF THE AFORESTATED JUDGMENT OF THE BOMBAY HIGH COUR T, WE ANSWER QUESTION NO 1 IN THE AFFIRMATIVE, IE, IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT QUESTION NO 2 HEREIN IS IDENTICAL TO THE QUESTION W HICH WAS RAISED BEFORE THE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX (EXEMPTION) V FRAMJEE CAWASJEE INSTITUTE [1993] 109 CTR 463 IN TH AT CASE, THE FACTS WERE AS FOLLOWS: THE ASSESSEE WAS T HE TRUST IT DERIVED ITS INCOME FROM DEPRECIABLE ASSETS THE ASSESSEE TOOK INTO ACCOUNT DEPRECIATION ON THOSE AS SETS IN COMPUTING THE INCOME OF THE TRUST THE INCOME-TAX OF FICER HELD THAT DEPRECIATION COULD NOT BE TAKEN INTO ACCO UNT BECAUSE, FULL CAPITAL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS THE ASSESSEE WENT IN APPEAL BEFORE THE APPELLATE ASSISTANT COMMISSIONER THE APPEAL WAS REJECTED THE TRIBUNAL, HOWEVER, TOOK THE VIEW THAT WHEN THE INCOME-TAX OFFICER STATED THAT FULL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISI TION OF THE ASSETS, WHAT HE REALLY MEANT WAS THAT THE AMOUN T 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, DEPRECIATION IN RESPECT OF THOSE ASSETS CANNOT BE TAKEN INTO ACCOUNT THIS VIEW OF THE TRIBU NAL HAS BEEN CONFIRMED BY THE BOMBAY HIGH COURT IN THE ABOV E JUDGMENT HENCE, QUESTION NO 2 IS COVERED BY THE DEC ISION OF THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT CONSEQUENTLY, QUESTION NO 2 IS ANSWERED IN THE ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 7 AFFIRMATIVE, IE, IN FAVOUR OF THE ASSESSEE AND AGAI NST THE DEPARTMENT NOW COMING TO QUESTION NO 3, THE POINT WHICH ARISES FOR CONSIDERATION IS : WHETHER EXCESS OF EXPENDITURE IN THE EARLIER YEARS CAN BE ADJUSTED AGAINST THE INCOME OF THE SUBSEQUENT YEAR AND WHETHER SUCH ADJUSTMENT SHOULD BE TREATED AS APPLICATION OF INCOME IN THE SUBSEQUENT YEAR FOR CHARITABLE PURPOSES? IT WAS ARGUED ON BEHALF OF THE DEPARTMENT THAT EXPENDITURE INCURRED IN THE EARLIER YEARS CANNOT BE MET OUT OF THE INCOME OF THE SUBSEQUENT Y EAR AND THAT UTILISATION OF SUCH INCOME FOR MEETING THE EXPENDITURE OF EARLIER YEARS WOULD NOT AMOUNT TO APPLICATION OF INCOME FOR CHARITABLE OR RELIGIOUS P URPOSES IN THE PRESENT CASE, THE ASSESSING OFFICER DID NOT ALLOW CARRY FORWARD OF THE EXCESS OF EXPENDITURE TO BE SE T OFF AGAINST THE SURPLUS OF THE SUBSEQUENT YEARS ON THE GROUND THAT IN THE CASE OF A CHARITABLE TRUST, THEI R INCOME WAS ASSESSABLE UNDER SELF-CONTAINED CODE MENTIONED IN SECTION 11 TO SECTION 13 OF THE INCOME-TAX ACT AND THAT THE INCOME OF THE CHARITABLE TRUST WAS NOT ASSESSAB LE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS' UNDE R SECTION 28 IN WHICH THE PROVISION FOR CARRY FORWARD OF LOSSES WAS RELEVANT THAT, IN THE CASE OF A CHARITAB LE TRUST, THERE WAS NO PROVISION FOR CARRY FORWARD OF THE EXC ESS OF EXPENDITURE OF EARLIER YEARS TO BE ADJUSTED AGAINST INCOME OF THE SUBSEQUENT YEARS WE DO NOT FIND ANY MERIT IN THIS ARGUMENT OF THE DEPARTMENT INCOME DERIVED FROM THE TRUST PROPERTY HAS ALSO GOT TO BE COMPUTED ON COMME RCIAL PRINCIPLES AND IF COMMERCIAL PRINCIPLES ARE APPLIED THEN ADJUSTMENT OF EXPENSES INCURRED BY THE TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES IN THE EARLIER YE ARS AGAINST THE INCOME EARNED BY THE TRUST IN THE SUBSE QUENT YEAR WILL HAVE TO BE REGARDED AS APPLICATION OF INC OME OF THE TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES IN THE SUBSEQUENT YEAR IN WHICH ADJUSTMENT HAS BEEN MADE HAVING REGARD TO THE BENEVOLENT PROVISIONS CONTAINE D IN SECTION 11 OF THE ACT AND THAT SUCH ADJUSTMENT WILL HAVE TO BE EXCLUDED FROM THE INCOME OF THE TRUST UNDER S ECTION 11(1)(A) OF THE ACT OUR VIEW IS ALSO SUPPORTED BY T HE JUDGMENT OF THE GUJARAT HIGH COURT IN THE CASE OF C IT V SHRI PLOT SWETAMBER MURTI PUJAK JAIN MANDAI [1995] 211 ITR 293 ACCORDINGLY, WE ANSWER QUESTION NO 3 IN THE AFFIRMATIVE, IE, IN FAVOUR OF THE ASSESSEE AND AGAI NST THE DEPARTMENT ACCORDINGLY, REFERENCE IS DISPOSED OF WITH NO ORDER AS TO COSTS. ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 8 IN THE LIGHT OF THE ABOVE DECISION, THE JUDICIAL DI SCIPLINE DEMANDS THAT THE TRIBUNAL IS EXPECTED TO FOLLOW THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT. SO FAR AS, THE CONTENTION OF THE LD. DR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL) IGNORED THE DECISION FROM HONBLE APEX COURT (SUPRA), IS CONCERNED, WE ARE OF THE VIEW THAT IF T HE DEPARTMENT IS AGGRIEVED BY ANY DECISION FROM HONBL E HIGH COURT THEN THE REMEDY LIES SOMEWHERE ELSE, AS AVAIL ABLE UNDER THE LAW. IT IS WORTH MENTIONING THAT WHILE CO MING TO A PARTICULAR CONCLUSION BY THE HONBLE HIGH COURT, TH E DECISION FROM HONBLE APEX COURT WAS VERY MUCH AVAILABLE. H OWEVER, IN VIEW OF THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT, WHEREIN, ANOTHER DECISION FROM HONBLE GUJARAT HIGH COURT IN (1995) 211 ITR 293(GUJ.) WAS ALSO CONSIDERED, HOLDI NG THAT INCOME DERIVED FROM THE TRUST PROPERTY ALSO HAS TO BE COMPUTED ON COMMERCIAL PRINCIPLE AND IF COMMERCIAL PRINCIPLES ARE APPLIED THEN ADJUSTMENT OF EXPENSES INCURRED BY THE TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES IN EARLIER YEARS AGAINST THE INCOME EARNED BY THE TRUST IN SUB SEQUENT YEARS WILL HAVE TO BE REGARDED AS APPLICATION OF IN COME OF THE TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES IN THE SUBSEQUENT YEAR IN WHICH ADJUSTMENT HAS BEEN MADE HAVING REGAR D TO THE BENEVOLENT PROVISIONS, CONTAINED IN SECTION 11 OF THE ACT AND THAT SUCH ADJUSTMENT WILL HAVE TO BE EXCLUDED F ROM THE INCOME OF THE TRUST U/S 11(1)(A) OF THE ACT. EVEN O THERWISE, IN A LATER DECISION IN DIT (E) VS SHRI VILE PARLE KELA VANI MANDAL (2015) 58 TAXMAN.COM 288, THE HONBLE JURISDICTIONA L HIGH COURT HELD AS UNDER:- ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 9 AS FAR AS QUESTION NO.4 IS CONCERNED, THIS COURT H AS REPEATEDLY HELD THAT THERE IS NOTHING LIKE DOUBLE DEDUCTION. WHEN T HE ASSESSEE HAS ACQUIRED AN ASSET FROM THE INCOME OF THE TRUST AND THEREAFTER THE AMOUNT THAT IS CLAIMED IS THE DEPRECIATION ON THE U SE OF THE ASSETS, SUCH DEPRECIATION CLAIM DOES NOT MEAN DOUBLE DEDUCT ION. THE DEDUCTION EARLIER CLAIMED IS TOWARDS APPLICATION OF FUNDS OF THE TRUST FOR ACQUIRING ASSETS. THE LATER IS DEPRECIATION AN D IT IS PERMISSIBLE DEDUCTION CONSIDERING THE USE OF THE ASSETS. THIS H AS BEEN CLARIFIED REPEATEDLY BY THIS COURT. IF ANY REFERENCE IS REQUI RED THEN THE CASE OF CIT VS INSTITUTION OF BANKING PERSONNEL SELECTION ( IBPS) (2003) 264 ITR 110/113 TAXMAN 386 (BOM.) IS ENOUGH. RESPECTFULLY FOLLOWING THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL). WE AFFIRM THE SAME. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PR ESENCE OF LD. DR AT THE CONCLUSION OF THE HEARING ON 13/06/20 16. SD/- SD/- ( ASHWANI TANEJA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ) DATED : 13/06/2016 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. 1 1 $ 2# ( +, ) / THE CIT, MUMBAI. 4. 1 1 $ 2# / CIT(A)- , MUMBAI ITA NO.205/MUM/2016 SOCIETY OF THE SERVANT OF THE HOLY SPIRIT 10 5. 34 /# , 1 +,' + 5 , $ % / DR, ITAT, MUMBAI 6. ! 6% / GUARD FILE. / BY ORDER, 03,# /# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI
