Karnataka Reddy Janasangha, Bangalore V. DDIT, Bangalore

ITA 220/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63667 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-06-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 02-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN THOMAS JOSE
• Keywords: Capital asset; Business income; Depreciation; Charitable institution; Opportunity of being heard; Capital expenditure
• Section: 143(3); 12A; 32; 263; 63; 11

Judgement Text

ITA NO.220/BANG/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO.220/BANG/2011 (ASST. YEAR 2006-07) KARNATAKA REDDY JANASANGHA, NO.73, REDDY BUILDING, J C ROAD, BANGALORE-2. PA NO.AAATR2160A VS THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), CENTRAL REVENUE BUILDING, BANGALORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. SHEETAL BORKAR, ADVOCATE RESPONDENT BY : SMT. SUSAN THOMAS JOSE, JCIT DATE OF HEARING : 17.07.2012 DATE OF PRONOUNCEMENT : 07.09.2012 OR DER PER JASON P BOAZ : THIS APPEAL INSTITUTED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE, DAT ED 12.01.2011 PASSED UNDER SECTION 263 OF THE ACT. THE RELEVANT ASSESSMENT YEAR IS 2006-07. 2. THE GROUNDS OF APPEAL RAISED READ AS FOLLOWS:- 1. IN LAW AND ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE, THERE BEING NO ERROR IN THE ASSESSMENT ORDER DATED 5.12.2008 UNDER SECTI ON 143(3), THE DIT ERRED IN INVOKING SECTION 263 OF THE ACT. 2. WITHOUT PREJUDICE, THE DIRECTOR OF INCOME TAX (E) OUGHT TO HAVE APPRECIATED THAT WITHOUT ADMITTING THE ASSESSMENT ORDER UNDER SECTIO N 143(3), MAY AT BEST BE AN ORDER PREJUDICIAL BUT THAT BEING NOT AN ERRONEOUS O RDER, THE PROVISIONS OF SECTION 263 ARE NOT ATTRACTED AND THEREFORE THE DITS ORDER IS REQUIRED TO BE SET ASIDE. 3. WITHOUT PREJUDICE, THE DIRECTOR OF INCOME TA X (E) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT IS A TRUST; THE SURPLUS IS NOT COMPUT ED AS BUSINESS INCOME; SECONDLY, THE APPLICATION OF INVESTMENTS IN THE ASSETS IS ALL OWED BY VIRTUE OF SECTION 11 OF THE ACT; AND TO ARRIVE AT THE REALISTIC SURPLUS FOR THE PURPOSE OF APPLICATION, DEPRECIATION, IS BEING ALLOWED UNDER COMMERCIAL PRINCIPLES. THER EFORE THE SAME WAS VALIDLY CLAIMED AND ALLOWED BY THE ASSESSING OFFICER AND IT WAS ONLY A CHANGE OF OPTION OF THE DIT WHICH WAS NOT PERMISSIBLE UNDER SECTION 263 OF THE ACT. 4. WITHOUT PREJUDICE, THE DIRECTOR OF INCOME T AX (E) OUGHT TO HAVE APPRECIATED THAT APPELLANT BEING A TRUST, HAS CLAIMED CAPITAL E XPENDITURE OF RS.1,61,04,398 AS ITA NO.220/BANG/2011 2 APPLICATION OF FUNDS TOWARDS THE OBJECTS OF THE TRU ST AND THE SURPLUS FOR THE PURPOSE OF SECTION 11 WAS NOT REQUIRED TO BE COMPUTED IN AC CORDANCE WITH THE PROVISIONS OF THE ACT. THE SURPLUS IS REQUIRED TO BE COMPUTED UN DER COMMERCIAL PRINCIPLES AND WHILE DOING SO, THE APPELLANT TRUST IS ENTITLED TO CLAIM DEPRECIATION ON THE ASSETS WHICH IS EVIDENT FROM THE FOLLOWING JUDGMENTS : I) CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE (1984 ) 146 ITR 28 (KAR). II) CIT VS. INSTITUTE OF BANKING (2003) 264 ITR 110 (BOM) III) DIT(E) VS. FRAMJEE CAWASJEE INSTITUTE (1993) 1 09 CTR (BOM) 463. 5. THE LD. DIT OUGHT TO HAVE APPRECIATED THE DIF FERENCE BETWEEN THE FACT OF THE CASE WHEREINTHE HON'BLE SUPREME COURT JUDGMENT (ESC ORTS LIMITED & ANOTHER VS. UNION OF INDIA 199 ITR 43) DEALS WITH DEDUCTION UND ER SECTION 35(2)(IV) AND THE SAID JUDGMENT WAS NOT APPLICABLE TO APPELLANTS CASE WHE RE THE SURPLUS IS COMPUTED UNDER COMMERCIAL PRINCIPLES. THUS THE LEARNED DIT ERRED IN APPLYING THE ABOVE SAID JUDGMENT (SUPRA) IN THE APPELLANT CASE. 6. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 3. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:- THE ASSESSEE IS A TRUST. RETURN OF INCOME FOR AS SESSMENT YEAR 2006-07 WAS FILED ON 20.2.2007 DECLARING NIL INCOME. THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY BY ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. THE ASSESS MENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 5/12/2008 ACCEPTING NIL IN COME DECLARED. SUBSEQUENTLY, THE DIT (EXEMPTIONS) NOTICED THAT THE ASSESSEE-TRUST HAD CL AIMED CAPITAL EXPENDITURE OF RS.2,21,81,241/- AND ALSO DEPRECIATION ON ASSETS AMOUNTING TO RS.1,6 1,04,398/- AS APPLICATION OF FUNDS TOWARDS THE OBJECTS OF THE TRUST. THIS, ACCORDING TO THE D IRECTOR OF INCOME-TAX (EXEMPTIONS), AMOUNTED TO DOUBLE DEDUCTION. ACCORDING TO THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), THE APEX COURT JUDGEMENT IN THE CASE OF ESCORTS LIMITED & ANOTHER V UNION OF INDIA REPORTED IN 199 ITR 143 IS APPLICABLE TO THE FACTS OF THIS CASE, WHEREIN IT WA S HELD THAT WHEN THE ENTIRE INVESTMENT ON THE CAPITAL ASSETS HAS BEEN ALLOWED AS A DEDUCTION UNDE R SECTION 35(2)(IV) IN RESPECT OF CAPITAL EXPENDITURE ON SCIENTIFIC RESEARCH, NO DEPRECIATION UNDER SECTION 32 ON THE SAME ASSET IS TO BE ALLOWED. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) THEREFORE ISSUED A SHOW-CAUSE NOTICE PROPOSING TO DISALLOW THE DEPRECATION AMOUNTING TO RS.1,61,04,398/- AS APPLICATION OF FUNDS TOWARDS OBJECTS OF THE TRUST, SINCE ACCORDING TO HI M, IT AMOUNTED TO DOUBLE DEDUCTION. 4. THE ASSESSEE OBJECTED TO INVOCATION OF REVISION ARY JURISDICTION UNDER SECTION 263 OF THE ACT VIDE ITS LETTER DATED 27/12/2010. THE A SSESSEE TRUST, PLACING RELIANCE OF THE JUDGEMENTS OF HONBLE APEX COURT IN THE CASE OF MAL ABAR INDUSTRIAL CO. LTD. (243 ITR 83) AND CIT V MAX INDIA LTD. (295 ITR 282) CONTENDED THAT W HEN TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAD CHOSEN ONE OF THE VIEWS, THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) IS NOT JUSTIFIED IN INVOKING THE PROVISION UNDER SECTION 2 63 OF THE ACT. ON MERITS IT WAS SUBMITTED THAT THE INCOME OF THE TRUST IS TO BE COMPUTED UNDER SEC TION 11 IN ACCORDANCE WITH THE COMMERCIAL ITA NO.220/BANG/2011 3 PRINCIPLES AND IN THE LIGHT OF THE SAME, THE ASSESS EE IS ENTITLED TO DEDUCTION OF DEPRECIATION. IT WAS FURTHER CONTENDED THAT THE SUPREME COURT DECISI ON RELIED ON BY THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) IS NOT APPLICABLE TO THE FACTS OF THE CASE, SINCE IN THE CASE OF THE TRUST, THE SURPLUS IS TO BE COMPUTED IN THE COMMERCIAL SENSE I.E. AS P ER THE BOOK INCOME AND NOT TOTAL INCOME AS DEFINED IN SECTION 2(45) OF THE ACT WITHOUT REFEREN CE TO THE HEADS OF INCOME SPECIFIED IN SECTION 14 OF THE ACT. 5. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) HOWEVER OBJECTED THE CONTENTIONS/OBJECTIONS RAISED BY THE ASSESSEE-TRUST . THE RELEVANT FINDING OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) READS AS FOLLOWS:- 5. IN PARA NO.2 OF ITS SUBMISSION, THE ASSESSEE C ONTENDS THAT THE SURPLUS IS REQUIRED TO BE COMPUTED ON COMMERCIAL PRINCIPLES AN D DEPRECIATION SHOULD BE ALLOWED. HOWEVER, WITH REGARD TO SUPREME COURT DEC ISION IN THE CASE OF ESCORTS LIMITED & ANOTHER VS. UNION OF INDIA, THE ASSESSEE SUBMITS THAT THE SURPLUS IN THE CASE OF A TRUST IS NOT COMPUTED AS BUSINESS INCOME. HENCE, THERE IS A INHERENT CONTRADICTION IN ASSESSEES SUBMISSION. FURTHER, I F THE SURPLUS IS TO BE COMPUTED ON THE COMMERCIAL PRINCIPLES AND DEPRECIATION TO BE AL LOWED, IN THE ASSESSEES CASE THE COST OF THE ASSETS IS NIL AS THE ENTIRE INVESTMENTS HAVE BEEN ALLOWED AS DEDUCTION. WHEN THE COST OF ASSETS IS NIL, THE DEPRECIATION AL LOWABLE WILL ALSO BE NIL. THE SUPREME COURT DECISION IN THE CASE OF ESCORTS LIMIT ED & ANOTHER VS. UNION OF INDIA IS DIRECTLY APPLICABLE TO THE FACTS OF THE CASE. F URTHER, THE KOCHI ITAT DECISION IN THE CASE OF DDIT(E), RANGE 2, ERNAKULAM VS. LISSIE MEDI CAL INSTITUTIONS, KOCHI IN ITA NO.1010/COCH/2008 & CO NO.6/COCH/2009 IS SQUARELY A PPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. IN VIEW OF THE APEX COURT DECISION IN THE CASE OF ESCORTS LIMITED AND THE KOCHI ITAT DECISION MENTIONED SUPRA, THE DEPRECIATION CAN NOT BE ALLOWED WHEN THE ENTIRE INVESTMENT ON THE ASSETS HAS ALREADY BEEN ALLOWED A S DEDUCTION. IN THE CIRCUMSTANCES, THE ASSESSMENT ORDER PASSED UNDER SE CTION 143(3) OF THE INCOME TAX ACT, 1961 ON 5.12.2008 IS SET ASIDE WITH A DIRE CTION TO THE ASSESSING OFFICER TO DISALLOW DEPRECIATION AMOUNTING TO RS.1,61,04,398, AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. THE ASSESSEE-TRUST BEING AGGRIEVED BY THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) IS IN APPEAL BEFORE US. 7. THE LEARNED AR SUBMITTED THAT THE ISSUE IN QUES TION IS SQUARELY COVERED BY THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF (I) CIT V SOCIETY OF THE SISTERS OF ST. ANNE (1984) 146 ITR 28 (KAR); (II) CIT V INSTIT UTE OF BANKING (2003) 264 ITR 110 (BOM.) AND (III) THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) V FRA MJEE CAWASJEE INSTITUTE (1993) 109 CTR (BOM) 463. 8. THE LEARNED DR ON THE OTHER HAND SUBMITTED THAT THE RECENT ORDER OF THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF DDIT(E), RANGE -2, ERNAKULAM V LISSIE MEDICAL INSTITUTIONS IN ITA NO.1010/COCH/2008 & CO. NO.6/COCH/2009 IS DI RECTLY ON THE ISSUE. THE COCHIN BENCH OF ITA NO.220/BANG/2011 4 THE TRIBUNAL HELD THAT WHEN COST OF AN ASSET IS ALL OWED AS AN APPLICATION OF INCOME TOWARDS OBJECTS OF THE TRUST, DEPRECIATION IN RESPECT OF TH E SAME ASSET CANNOT BE ALLOWED AS A DEDUCTION IN ORDER TO ARRIVE AT THE INCOME OF THE TRUST. IT WAS SUBMITTED BY THE LEARNED DR THAT THE COCHIN BENCH ORDER OF THE TRIBUNAL HAD DISTINGUISHED THE J UDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V SOCIETY OF THE SISTERS O F ST. ANNE 146 ITR 28. THE LEARNED DR ALSO PLACED RELIANCE ON THE JUDGEMENT OF THE HONBLE APE X COURT IN THE CASE OF ESCORTS LIMITED SUPRA. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS ON RECORD. THE INCOME OF THE TRUST IS REQUIRED TO BE COMPUTED UNDER SECTION 11 ON COMMERCIAL PRINCIPLES, WITHOUT REFERENCE TO THE HEADS OF THE I NCOME SPECIFIED UNDER SECTION 14 OF THE ACT. IN OTHER WORDS, IT IS TO BE COMPUTED AS PER THE BOOK I NCOME AND NOT TOTAL INCOME AS DEFINED IN SECTION 2(45) OF THE ACT. THIS PROPOSITION IS LAID DOWN BY VARIOUS JUDGEMENTS OF HONBLE HIGH COURTS, NAMELY, (I) CIT V TRUSTEE OF H.E.H. NIZAMS SUPPLEMENTAL RELIGIOUS ENDOWMENT TRUST 127 ITR 378 (AP); (II) CIT V RAO BAHADUR CALAVALA C UNNAN CHETTY CHARITIES 135 ITR 485 (MAD.) & (III) CIT V ESTATE OF V.L.ETHIRAJ 136 ITR 12 (MAD .). THIS POSITION IS ALSO CONFIRMED BY THE CBDT VIDE ITS CIRCULAR NO.5-P (LXX-6) DATED 19 TH JUNE, 1968. THE INCOME OF THE TRUST IS TO BE COMPUTED ON THE COMMERCIAL BASIS I.E. AS PER NORMAL ACCOUNTING. THE NORMAL ACCOUNTING PRINCIPLES CLEARLY PROVIDE FOR DEDUCTING DEPRECIATI ON TO ARRIVE AT INCOME. THE INCOME SO ARRIVED AT (AFTER DEDUCTING THE DEPRECIATION) IS TO BE APPL IED FOR CHARITABLE PURPOSE. CAPITAL EXPENSE IS APPLICATION OF THE INCOME SO DETERMINED. THE APPLI CATION OF THE INCOME SO DETERMINED CANNOT BE STATED TO BE A DEDUCTION TO ARRIVE AT THE INCOME. THE DEPRECIATION IS TO BE DEDUCTED TO DETERMINE THE INCOME UNDER SECTION 11 OF THE ACT AND IT IS NO T AN APPLICATION OF INCOME. THEREFORE, THERE IS NO DOUBLE DEDUCTION AS CLAIMED BY THE DIT(E) IN HIS ORDER. 9.1 THE CONTROVERSY, ACCORDING TO US, IS SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V INST ITUTE OF BANKING 264 ITR 110. THE HONBLE BOMBAY HIGH COURT WAS CONSIDERING THE FOLLOWING QUE STION OF LAW:- WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE TRIBUNAL WAS RIGHT IN LAW IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON THE ASSETS THE COST OF WHICH HAS BEEN FULLY ALLOWED AS APPLICATION OF INCOME U/S 11 IN THE PAST YEARS? 9.2 FOLLOWING ARE THE FACTS OF THE CASE CONSIDERED BY THE HONBLE BOMBAY HIGH COURT:- ITA NO.220/BANG/2011 5 THE ASSESSEE WAS A TRUST REGISTERED UNDER THE BOM BAY PUBLIC TRUST ACT AND SECTION 12A OF THE I T ACT. THE OBJECT OF THE ASSE SSEE WAS CHARITABLE IN NATURE. THE INCOME OF THE ASSESSEE WAS EXEMPT U/S 11 OF THE I T ACT. THE ASSESSEE HAD CLAIMED DEPRECIATION WHICH WAS REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT CAPITAL EXPENDITURE INCURRED DURING THE ACCOUNTING YEAR WAS ALLOWED AS A DEDUCTION FROM THE INCOME OF THE ASSESSEE. FURTHER, THE ASSESSEE HAD CLAIMED DEPRECIATION ON FURNITURE AND FIXTURES TO THE TUNE OF RS.49,453/- AT 10% OF THE WRITTEN DOWN VALUE WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THE SAID ASSETS HAD BEEN RECEIVED BY THE ASSESSEE ON TR ANSFER FROM NATIONAL INSTITUTE OF BANK MANAGEMENT. THAT INSTITUTE WAS A CHARITABLE TRUST. ITS INCOME WAS ALSO EXEMPT U/S 11 OF THE I T ACT. THE ASSESSING OFFICER DID NOT ALLOW DEPRECIAT ION ON FIXTURES AND FURNITURE ON THE GROUND THAT FULL DEDUCTION HAD BEEN ALLOWED IN RESPECT OF CAPIT AL COST OF FURNITURE AND FIXTURES AND IF THE DEPRECIATION WAS ALLOWED, AS CLAIMED BY THE ASSESSE E, IT WOULD RESULT IN DOUBLE DEDUCTION. THE ASSESSEE CARRIED THE MATTER IN APPEAL AND THE APPEL LATE AUTHORITY DECIDED THE MATTER IN FAVOUR OF ASSESSEE. THE DECISION OF THE APPELLATE AUTHORITY WAS CONFIRMED BY THE TRIBUNAL. 9.3 ON REFERENCE, THE BOMBAY HIGH COURT HELD THAT THE TRIBUNAL WAS RIGHT IN LAW IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATI ON ON THE ASSETS, THE COST OF WHICH HAD BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTIO N 11 IN THE PAST YEARS. 9.4 THE HONBLE JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT V SOCIETY OF THE SISTERS OF ST. ANNE 146 ITR 26 HAD CATEGORICALLY HELD THAT THE AMOUNT OF DEPRECIATION DEBITED TO THE ACCOUNTS OF A CHARITABLE INSTITUTION IS TO BE DEDUC TED TO ARRIVE AT THE AVAILABLE INCOME FOR THE PURPOSE OF APPLICATION TO CHARITABLE AND RELIGIOUS PURPOSES. THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT HAS BEEN FOLLOWED BY THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V RAIPUR PALLOTTINE SOCIETY 180 ITR 579 AND BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF GONVINDU NAICKER ESTATE V ASSISTANT DIRECTO R OF INCOME TAX AND ANOTHER 248 ITR 368. FURTHER, IN THE CASE OF CIT V SHETH MANILAL RANCHH ODDAS VISHRAM BHAVAN TRUST 198 IITR 598, IT WAS HELD BY THE HONBLE GUJARAT HIGH COURT THAT DEPRECIATION SHOULD BE ALLOWED WHILE COMPUTING THE INCOME UNDER SECTION 11(I)(A) OF THE ACT. 9.5 THE JUDGEMENT OF THE HONBLE APEX COURT RELIED ON BY THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) IS DISTINGUISHABLE. THE ISSUE BEFORE THE HONBLE SUPREME COURT WAS THAT WHETHER BOTH DEPRECIATION UNDER SECTION 32 AND CAPITAL EXPE NDITURE ON SCIENTIFIC RESEARCH UNDER SECTION 35(1)(IV) CAN BE CLAIMED AS DEDUCTION. IN THE CASE BEFORE THE HONBLE SUPREME COURT, BOTH DEDUCTIONS WERE UNDER THE HEAD BUSINESS INCOME WH EREAS IN THE CASE OF A CHARITABLE TRUST, ITA NO.220/BANG/2011 6 DEPRECIATION IS A DEDUCTION TO ARRIVE AT INCOME AND CAPITAL EXPENDITURE IS APPLICATION OF SUCH INCOME. THE AFORESAID JUDGEMENT OF THE HONBLE APE X COURT IN THE CASE OF ESCORTS LIMITED (SUPRA) CANNOT BE APPLIED TO DETERMINE TAXABLE INCO ME FOR A TRUST, AS THE PROVISIONS TO DETERMINE TAXABLE INCOME OF THE TRUST ARE TOTALLY DIFFERENT A ND NORMAL PROVISIONS FOR COMPUTING INCOME UNDER THE FIVE HEADS CANNOT BE APPLIED. THOUGH THE COCHIN BENCH OF THE TRIBUNAL IS RENDERED ON IDENTICAL ISSUE, WE WOULD PREFER TO FOLLOW THE J UDGEMENTS OF VARIOUS HIGH COURTS, (CITED SUPRA) IN PREFERENCE TO THE ORDER OF THE COCHIN BENCH TRIB UNAL. THEREFORE, WE HOLD THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEPRECIATION AND IT IS TO BE ALLOWED AS DEDUCTION IN ORDER TO ARRIVE AT THE INCOME OF THE ASSESSEE-TRUST. IT IS ORDERED ACCORD INGLY. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH DAY OF AUGUST, 2012. SD/- SD /- (GEORGE GEORGE K) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER *GPR COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNE D. 4. THE CIT(A) CONCERNED. 5. DR 6. GF BY ORDER SENIOR PRIVATE SECRETARY, ITAT, BANGALORE.