Income Tax Officer -(Exemption), Lucknow V. M/s. Barrows Blue Bells School, Bahraich

ITA 358/LKW/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4018 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 13-07-2016
• Assessment Year: 2013-2014
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Charitable institution; Additional evidence; Capital expenditure
• Section: 12A; 10B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH : LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.358/LKW/2016 ASSESSMENT YEAR : 2013-14 THE INCOME TAX OFFICER (EXEMPTION), LUCKNOW. VS. M/S. BARROWS BLUE BELLS SCHOOL, CIVIL LINES, BAHARAICH. PAN: AAATB 7151K APPELLANT RESPONDENT APPELLANT BY : SHRI AMIT NIGAM, DR RESPONDENT BY : SHRI RAKESH GARG, ADVOCATE DATE OF HEARING : 15.07.2016 DATE OF PRONOUNCEMENT : 31.08.2016 O R D E R THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST T HE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 43,48,792/- ACCEPTING THE FORM NO. 10 & FORM NO. 10B AS ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES 1962 WITHOUT GIVING REASONABLE OPPORTUNITY TO THE ASSESSING OFFICER AS PER RULE 46A(3) OF THE INCOME TAX RULES 1962. 2, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 43,48,792/- AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE VIDE ITS REPLY REF. NO. UP /276/124/2015 DATED 19.08.2015 IN PAGE NO. 4 AND PARA NOS. 09 & 10 HAS ITSELF STATED THAT THERE IS NO AMOUNT ITA NO.358/LKW/2016 PAGE 2 OF 10 ACCUMULATED/SET APART WITHIN THE MEANING OF SECTION 11(2) IN LAST 10 YEARS AND THERE IS NO SUCH INCOME UNDER SECTION 11(2) FOR WHICH FORM-L0 REQUIRED. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 43,48,792/- WHEREAS THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS HIMSELF OBSERVED IN HIS ORDER THAT IT IS A FACT THA T THE ASSESSEE HAS NOT PRODUCED FORM NO. 10 AND FORM NO. 10B DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 8,13,513/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION WHEREAS THE ASSESSEE HAS ALREADY CLAIMED 100% DEDUCTION TOWARDS CAPITAL EXPENDITURE AT TIME OF ACQUIRING CAPITAL ASSETS, TH EREFORE, THE CLAIM OF DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATIO N OF RS.8,13,513/- WAS NOT ALLOWABLE. 5. THE ORDER OF LD. CIT(A) BE CANCELLED AND THE OR DER OF THE AO BE RESTORED. 6. APPELLANT CRAVES LEAVE TO MODIFY/AMEND OR ADD A NYONE OR MORE GROUNDS OF APPEAL. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD AR E THAT THE ASSESSEE SOCIETY IS REGISTERED U/S. 12A OF THE ACT W.E.F. 14 .3.2000 AND FILED ITS RETURN OF INCOME ON 19.7.2013 SHOWING NIL INCOME. THE AS SESSEE IS RUNNING A SCHOOL IN THE NAME OF BARROWS BLUE BELL SCHOOL. GROSS RECEIPTS SHOWN WAS OF RS.139.87 LAKHS AND INCOME APPLIED FOR CHARI TABLE PURPOSE WAS RS.75.40 LAKHS I.E., 54% OF THE GROSS RECEIPTS. TH E ASSESSING OFFICER HELD THAT ASSESSEE HAD TO APPLY 85% OF RS.139.87 LAKHS T OWARDS CHARITABLE PURPOSES I.E., RS.118.89 LAKHS AS PER THE PROVISION S OF SECTION 11(1)(A) OF THE ACT. THE AO HAS ALSO NOTED THAT ASSESSEE HAS N OT SUBMITTED FORM 10 ITA NO.358/LKW/2016 PAGE 3 OF 10 FOR ACCUMULATION OF INCOME U/S. 11(2) OF THE ACT. THUS, HE MADE AN ADDITION OF RS.43,48,798 (I.E., RS.1,18,89,658 RS .75,40,866) TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE HAS ALSO DEBI TED RS.8,13,513 TOWARDS DEPRECIATION, WHICH WAS DISALLOWED BY THE A O HAVING HELD THAT ASSESSEE HAS CLAIMED 100% DEDUCTION TOWARDS CAPITAL EXPENDITURE AT THE TIME OF ACQUIRING THE ASSETS. 3. AN APPEAL WAS PREFERRED BEFORE THE CIT(APPEALS) WITH THE SUBMISSION THAT BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE DULY AUDITED BY CA AND AUDIT REPORT WAS OBTAINED ON THE BASIS OF WHICH, RETURN WAS FINALLY FILED. AS PER PROVISIONS OF SECTION 11 (2) OF THE ACT, ASSESSEE WAS REQUIRED TO GIVE A NOTICE IN FORM 10 TO THE AO FOR ACCUMULATION OF AMOUNT WHICH WAS NOT EXHAUSTED AS PER SECTION 11(1) (A) OF THE ACT. WHEN NOTICE IS GIVEN FOR ACCUMULATION OF AMOUNT, THEN TH ERE SHOULD BE NO ADDITION. IT WAS FURTHER CONTENDED THAT ASSESSEE H AS FILED FORM 10 ON 9.3.2013 WELL WITHIN THE TIME LIMIT SPECIFIED UNDER THE PROVISIONS OF SECTION 11 OF THE ACT AND IN SUPPORT THEREOF, COPY OF FORM 10 WAS ALSO FILED BEFORE THE CIT(APPEALS). AUDIT REPORT IN FORM 10B WAS AL SO FILED BEFORE THE CIT(APPEALS). IT WAS FURTHER CONTENDED THAT SINCE ASSESSEE HAS COMPLIED WITH ALL THE CONDITIONS PRESCRIBED U/S. 11 OF THE A CT BY FILING FORM 10 WELL WITHIN THE PRESCRIBED TIME, AND HAS ALSO DEPOSITED THE ACCUMULATED SUM IN THE NATIONALIZED BANK, NO ADDITION SHOULD BE MADE F OR THE SIMPLE REASON THAT FORM 10 WAS NOT SUBMITTED AT THE TIME OF ASSES SMENT PROCEEDINGS. BESIDES, ASSESSEE ALSO PLACED RELIANCE UPON VARIOUS JUDGMENTS OF DIFFERENT ITA NO.358/LKW/2016 PAGE 4 OF 10 HIGH COURTS IN SUPPORT OF ITS CONTENTION THAT FORM 10 CAN BE FILED TILL AN APPEAL IS PENDING BEFORE THE TRIBUNAL. 4. THE CIT(APPEALS) RE-EXAMINED THE CLAIM OF THE AS SESSEE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS AND WAS OF THE V IEW THAT FORM 10 AND FORM 10B WERE DULY SUBMITTED FOR ACCUMULATION OF IN COME U/S. 11(2) BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS, THEREFORE NO ADDITION WAS CALLED FOR. ACCORDINGLY HE DELETED THE ADDITIONS. THE RE LEVANT OBSERVATIONS OF THE CIT(APPEALS) IS EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- 5.1 THE AO HAS MAINLY MADE THIS ADDITION FOR THE REASON THAT FORM 10 AND FORM 10B WERE NOT SUBMITTED FOR ACCUMUL ATION OF PROFIT U/S. 11(2) OF THE ACT. 5.2 THE RETURN WAS FILED BEFORE ITO-I, BAHRAICH AND NOTICE U/S 143(2) WAS ISSUED BY ITO-I, BAHRAICH. SUBSEQUENTLY THE RETURN WAS TRANSFERRED TO ITO(EXEMPTION), LUCKNOW. 5.3 IN THE PRESENT CASE FORM NO. 10 WAS FILED BEFO RE ITO-I, BAHRAICH ON 26.06.2013. THE FORM NO. 10 AND FORM NO . 10B WERE FILED BEFORE THE UNDERSIGNED DURING THE COURSE OF APPELLATE PROCEEDINGS. THE FORM NO.10 MENTIONS THAT AN AMOUNT OF RS. 35,29,964/- SHOULD BE ACCUMULATED APART TILL THE PREVIOUS YEAR ENDING ON 2017-18. IT IS ALSO A FACT THAT APPELLANT COULD NOT PRODUCE FROM NO. 10 AND 10 B DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT HAS RELIED ON JUDGEMENT OF HON'BLE GUJRAT HIGH COURT IN CASE OF CIT VS. MAYUR FOUNDATION REPORTED IN 194 CTR 197 2005. THE ONLY QUESTION WHICH THE HON'BLE COURT WAS REQUIRED TO DECIDE WAS, AS TO WHETHER, IN ABSENCE O F ANY SPECIFIC TIME LIMIT PRESCRIBED U/S 11(2) OF THE ACT , WHETHER THE TIME LIMIT PRESCRIBED IN RULE 17 FOR SUBMISSION OF FORM 10 BY THE RULE MAKING AUTHORITY IS VALID. THE HON'B LE COURT HELD THAT IT IS APPARENT THAT THE HON'BLE APEX COUR T IN CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION HAS STATED THAT DETAILS HAVE TO BE FURNISHED BEFORE THE COMPLETION OF ASSES SMENT ITA NO.358/LKW/2016 PAGE 5 OF 10 PROCEEDINGS AND ANY INFORMATION SUPPLIED SUBSEQUENT TO COMPLETION OF ASSESSMENT CANNOT BE TAKEN INTO CONSI DERATION. THE QUESTION THEREFORE, AROSE IS WHEN CAN AN ASSESS MENT BE SAID TO BE COMPLETE OR TILL WHAT POINT OF TIME THE ASSESSMENT PROCEEDINGS CAN BE SAID TO BE ALIVE. ON THIS ISSUE THE HON'BLE COURT HELD AS UNDER:- '13. THUS, THE PROCEEDINGS BEFORE THE TRIBUNAL ARE MEANT TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. IF THIS BE SO, IT FOLLOWS THAT THE ASSESS MENT PROCEEDINGS CANNOT BE SAID TO BE COMPLETE AND IS PENDING TILL THE APPEAL IS HEARD AND DISPOSED OFF B Y THE TRIBUNAL AND THE ORDER OF THE TRIBUNAL IS GIVEN EFFECT TO BY THE ASSESSING AUTHORITY BY COMPUTING T HE CORRECT TAX LIABILITY OF AN ASSESSEE. IN OTHER WORD S, WHETHER AN ASSESSEE IS REQUIRED TO PAY TAX OR BECOMES ENTITLED TO A REFUND, WOULD BE ASCERTAINED BY THE ASSESSING AUTHORITY AFTER GIVING EFFECT TO T HE ORDER OF THE TRIBUNAL. 14. LN THESE CIRCUMSTANCES, IN THE PRESENT CASE, TH E TRIBUNAL WAS WELL WITHIN ITS JURISDICTIONAL ENTERTA IN THE NEW GROUND BY WHICH THE ASSESSEE CLAIMED THE BENEFIT UNDER SECTION 11(2) OF THE ACT AND ADJUDICA TE THE TAX LIABILITY OF THE ASSESSEE. AS ALREADY NOTIC ED HEREINBEFORE, THE TRIBUNAL HAS CATEGORICALLY FOUND THAT THE ADDITIONAL GROUND INVOLVES THE QUESTION RELATING TO INTERPRETATION OF SECTION 11(2) AND THE FACTS ON THE BASIS OF WHICH SUCH A DECISION IS TO B E GIVEN REGARDING INTERPRETATION OF SECTION 11(2) ARE NOT AT ALL IN DISPUTE'. IN THE CIRCUMSTANCES, THERE IS NO INFIRMITY IN THE ORDER OF THE TRIBUNAL, HOLDING THAT THE ASSESSEE IS ENTITLED TO BENEFITS ALLOWABLE UNDE R SECTION 11(2) OF THE ACT.' IN VIEW OF THE ABOVE MENTIONED DECISION OF HON'BLE GUJRAT HIGH COURT THE ADDITION MADE BY THE AO CANNOT BE SU STAINED AS THE FORM NO. 10 AND FORM NO. 10B WERE DULY FILED BEFORE ITO-I, BAHRAICH AND BEFORE THE UNDERSIGNED DURING T HE COURSE OF APPELLATE PROCEEDINGS. THUS THE FORM NO. 10 AND FORM NO. 10B WERE DULY SUBMITTED FOR ACCUMULATION OF PRO FIT U/S 11(2) OF THE ACT BEFORE THE COMPLETION OF THE ASSES SMENT ITA NO.358/LKW/2016 PAGE 6 OF 10 PROCEEDINGS. THE ADDITION IS HEREBY DELETED. THE GR OUNDS OF APPEAL NO. 1,2 AND 3 ARE ALLOWED. 5. AGGRIEVED, THE REVENUE HAS PREFERRED APPEAL BEFO RE THE TRIBUNAL ASSAILING THE ORDER OF CIT(APPEALS), WHEREAS THE LD . COUNSEL FOR THE ASSESSEE, BESIDES PLACING RELIANCE ON THE ORDER OF CIT(APPEALS), HAS CONTENDED THAT NOTICE FOR ACCUMULATION OF FUND WAS DULY GIVEN TO THE AO, THEREFORE NO DISALLOWANCE CAN BE MADE. OUR ATTENTI ON WAS ALSO INVITED TO FORM 10 SUBMITTED TO THE ASSESSING AUTHORITY ON 26. 6.2013 ALONG WITH COPY OF RESOLUTION PASSED BY THE ADVISORY COMMITTEE OF T HE SOCIETY. COPY OF FORM 10 IS ALSO PLACED ON RECORD. 6. HAVING CAREFULLY EXAMINED THE ORDER OF LOWER AUT HORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT ASSESSEE HAS GIVE N A NOTICE OF ACCUMULATION OF FUNDS, BUT THE AO DID NOT TAKE COGN IZANCE OF THIS FACT AND HAS MADE THE ADDITION; WHEREAS THE CIT(APPEALS) HAS EXAMINED THE ISSUE IN DETAIL IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNC EMENTS AND SINCE I DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(APPEALS), I CONFIRM THE SAME. 7. THE OTHER GROUNDS RELATE TO DISALLOWANCE OF DEPR ECIATION CLAIMED BY THE ASSESSEE. IN THIS REGARD, RELIANCE WAS PLACED UPON BY THE ASSESSEE ON THE ORDER OF CIT(APPEALS). I HAVE CAREFULLY EXAMIN ED THE ORDER OF CIT(APPEALS) AND I FIND THAT THE CIT(APPEALS) HAS A DJUDICATED THE ISSUE IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS OF DIF FERENT HIGH COURTS, ITA NO.358/LKW/2016 PAGE 7 OF 10 BESIDES THE ORDER OF THE TRIBUNAL LUCKNOW BENCH. F OR THE SAKE OF REFERENCE, THE RELEVANT OBSERVATIONS OF THE CIT(APP EALS) IS AS UNDER:- 6. THE AO HELD THAT THE APPELLANT HAS CLAIMED 100% DEDUCTION TOWARDS CAPITAL EXPENDITURE AT TIME OF AC QUIRING CAPITAL ASSETS, THEREFORE, THE CLAIM OF DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION OF RS.8,13,513/- WAS DISALLOWED. 6.1 THE HON'BLE BOMBAY HIGH COURT HAS REJECTED THE REFERENCE APPLICATION OF THE INCOME TAX DEPARTMENT IN THE CASE OF CIT VS. FRAMJEE CAWASJEE INSTITUTE (1993) 109 CT R 463, HOLDING THAT THE ANSWER TO THE QUESTION WHETHER DEP RECIATION WAS ALLOWABLE TO A CHARITABLE TRUST WAS SELF-EVIDENT, E VEN IF THE CAPITAL VALUE OF THE ASSETS ON WHICH DEPRECIATION W AS CLAIMED HAD BEEN ALLOWED AS A DEDUCTION UNDER SECTION 11 AS AN APPLICATION OF INCOME FOR RELIGIOUS OR CHARITABLE PURPOSES. ONCE A GAIN IN CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION (IBPS) 264 ITR 110, THE HON'BLE BOMBAY HIGH COURT HELD THAT DEPRECIATIO N SHOULD BE ALLOWED EVEN ON ASSETS, THE COST OF WHICH HAD BEEN ALLOWED AS EXEMPT UNDER SECTION 11 IN THE PRECEDING YEARS. THE HON'BLE BOMBAY HIGH COURT ALSO HELD THAT DEPRECIATION SHOUL D BE ALLOWED EVEN ON ASSETS RECEIVED ON TRANSFER FROM AN OTHER CHARITABLE TRUST ON WHICH NO COST WAS BORNE BY THE ASSESSEE TRUST. OTHER HON'BLE HIGH COURTS WHICH HAVE ALSO TAKEN TH E VIEW THAT DEPRECIATION IS DEDUCTIBLE ARE THE HON'BLE KAR NATAKA HIGH COURT IN THE CASE OF CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE(1984) 146 ITR 28 AND THE HON'BLE MADHYA PRADES H HIGH COURT IN THE CASE OF CIT VS. RAIPUR PALLOTTINE SOCI ETY (1989) 180 ITR 579. IN CLT VS. SETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST(1992) 105 CTR (GUJ.) 303 IT WAS HELD THAT DEP RECIATION SHOULD BE ALLOWED WHILE COMPUTING SUCH INCOME UNDER SECTION 11(I) (A). THE CONTENTION OF THE APPELLANT IS FURTHER SUPPORTE D BY THE FOLLOWING JUDGMENTS. A. DIT VS. VISHWA JAGRITI MISSION(2014) 47 TAXMAN 56 ( DELHI HC) WHEREIN IT WAS HELD THAT CLAIM OF DEPRECIATION SHOULD BE ITA NO.358/LKW/2016 PAGE 8 OF 10 ALLOWED AS PER PRINCIPLE RELATED TO COMMERCIAL ACCO UNTING WHEN COMPUTING BUSINESS INCOME. B. CIT VS. THE SOCIETY OF SISTER OF ST. ANNE.(KARNATAK A HC) C. HON'BLE ITAT LUCKNOW B BENCH IN THE CASE OF ACIT VS . SARASWATI GYAN MANDI SIKSHA SANSTHAN(2014) 50 TAXMA N HELD THAT DEPRECIATION IS ALLOWABLE EVEN ON ASSETS WHOSE ENTIRE COST HAS BEEN ALLOWED AS DEDUCTION BY WAY OF EXEMPT ION U/S 11. DEPRECIATION IS THE EXHAUSTION OF EFFECTIVE LIFE O F A FIXED ASSET OWING ITS 'USE' OR OBSOLESCENCE. IT IS COMPUT ED AS THAT PART OF THE COST OF ASSET WHICH WILL NOT BE RECOVERED WHEN THE ASSET IS PUT TO USE. AT THE END OF THE EFFECTIVE LIFE THE ASSET CEASES TO EARN REVENUE. DEPRECIATION IS NOTHING BUT DECREASE IN V ALUE OF PROPERTY THROUGH WEAR DETERIORATION OR OBSOLESCENCE . IF DEPRECIATION IS NOT ALLOWED AS NECESSARY DEDUCTION FOR COMPUTING THE INCOME OF CHARITABLE INSTITUTIONS, THEN THERE I S NO WAY TO PRESERVE THE CORPUS OF THE TRUST FOR DERIVING THE I NCOME (HELD BY KARNATAKA HC IN CIT VS. SOCIETY OF SISTER OF ST. AN NE).THE VARIOUS JUDGEMENT CITED ABOVE, ESPECIALLY JUDGEMENT OF HON'BLE DELHI HC IN DIT VS. VISHWA JAGRATI MISSION(2014) AN D THE JUDGMENT OF HON'BLE ITAT LUCKNOW B BENCH IN CASE OF ACLT VS. SARASWATI GYAN MANDIR SIKSHA SANSTHAN (2014) SU PPORT THE CASE OF THE APPELLANT BECAUSE IT WAS HELD IN THESE JUDGEMENTS THAT INCOME OF THE APPELLANT TRUST HAS TO BE COMPUTED ON COMMERCIAL ACCOUNTANCY PRINCIPLES AFTER ALLOWING THE CLAIM OF DEPRECIATION. IT WAS HELD THAT DEPRECIATION IS ALLOWABLE EVEN ON ASS ETS WHOSE ENTIRE COST HAS BEEN ALLOWED AS DEDUCTION BY WAY OF EXEMPTION U/S 11 OF I.T. ACT. THE DECISION OF HON'BLE JURISDI CTIONAL ITAT AND HON'BLE DELHI HIGH COURT ARE IN FAVOUR OF APPEL LANT. 6.2 IN VIEW OF THE ABOVE CITED FACTS AND DECISIONS OF HON'BLE HIGH COURTS AND HON'BLE JURISDICTIONAL ITAT, THE CL AIM OF DEPRECIATION OF RS. 8,13,573/- IS HEREBY ALLOWED. T HE GROUND OF APPEAL NO.4 IS HEREBY ALLOWED. ITA NO.358/LKW/2016 PAGE 9 OF 10 8. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL, BUT HE COULD NOT POINT OUT ANY SPECIFIC DEFECT IN THE ORDE R OF CIT(APPEALS). HAVING CAREFULLY EXAMINED THE ORDER OF CIT(APPEALS), I FIN D THAT THE CIT(APPEALS) HAS DECIDED THE ISSUE IN THE LIGHT OF JUDGMENTS OF VARIOUS HIGH COURTS IN WHICH IT HAS BEEN HELD THAT DEPRECIATION IS EXHAUST ION OF EFFECTIVE LIFE OF A FIXED ASSET OWING TO ITS USE OR OBSOLESCENCE. IT IS COMPUTED AS PART OF THE COST OF ASSET WHICH WILL NOT BE RECOVERED WHEN THE ASSET IS PUT TO USE. EVEN THE HONBLE BOMBAY HIGH COURT HAS HELD THAT DE PRECIATION SHOULD BE ALLOWED EVEN ON ASSETS RECEIVED ON TRANSFER ON WHIC H NO COST WAS BORNE BY THE ASSESSEE TRUST. IN THE LIGHT OF VARIOUS JUD ICIAL PRONOUNCEMENTS, I AM OF THE VIEW THAT THE CIT(APPEALS) HAS PROPERLY ADJU DICATED THE ISSUE AND NO INTERFERENCE IS CALLED FOR. ACCORDINGLY, I CONFIRM THE ORDER OF THE CIT(APPEALS). 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF AUGUST, 2016. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER LUCKNOW, DATED, THE 31 ST AUGUST, 2016. /D S/ ITA NO.358/LKW/2016 PAGE 10 OF 10 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT. BY ORDER ASSISTANT REGISTRAR.