ITO (E) - 2(2), MUMBAI V. PUNJAB KESARI CHARITABLE TRUST, MUMBAI

ITA 5578/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7693 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 04-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G PANSARI
• Keywords: Capital asset; Depreciation; Charitable institution; Tax effect; Capital expenditure; Set aside
• Section: 143(3); 12A; 264; 64; 32; 28; 11

Judgement Text

ITA 5578/MUM/2017 C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.5578/ MUM/2017 ( / ASSESSMENT YEAR : 2012 - 13) ITO (E) - 2(2) MUMBAI / V. M/S. PUNJAB KESARI CHARITABLE TRUST 242, BHANDAR G ALLI, L.J. ROAD , MAHIM, MUMBAI - 400016 ./ PAN :AAATP0040R ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY: SHRI. D.G. PANSARI (DR) ASSESSEE BY : MS. RENU KAPOOR / DATE OF HEARING : 16.01.2019 / DATE OF PRONOUNCEMENT : 16 .01.2019 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER: THIS APPEAL, FILED BY REVENUE, BEING ITA NO. 5578/MUM/2017, IS DIRECTED AGAINST APPELLATE ORDER DATED 23.06.2017 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1, MUMBAI (HEREINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEAR (AY) 2012 - 13 , THE APPELLATE PROCEEDINGS HAD ARISEN BEFORE LEARNED CIT(A) FROM THE ASSESSMENT ORDER DATED 16.03.2015 PASSED BY LEARNED ASSESSING OFFICER ITA 5578/MUM/2017 (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) FOR AY 2012 - 13 . 2. THE GROUNDS OF APPEAL RAISED BY REVENUE IN THE MEMO OF APPEAL FILED WITH THE INCOME - TAX APPELLATE TRIBUNAL, MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER: - 'WHETHER ON THE FACTS OF THE CASE AND IN LAW THE ID.CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON ACCOUNT OF DISALLOWING DEPRECIATION OF RS. 24,56,519/ - IN CONTRAVENTION OF THE DECISION OF ESCORTS LTD. VS. UOI 199 ITR 43 WHEREIN IT WAS HELD THAT SINCE SECTION 11 OF THE INCOME TAX ACT PROVIDES FOR DEDUCTION OF CAPITAL EXPENDITURE INCURRED ON ASSETS ACQUIRED FOR THE OBJECTS OF THE TRUST AS APPLICATION AND DOES NOT SPECIFICALLY & EXPRESSLY PROVIDE FOR DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION ON T HE SAME VERY ASSETS ACQUIRED FROM SUCH CAPITAL EXPENDITURE, NO DEDUCTION SHALL BE ALLOWED U/S.32 FOR THE SAME OR ANY OTHER PREVIOUS YEAR IN RESPECT OF THAT ASSET AS IT AMOUNTS TO CLAIMING A DOUBLE DEDUCTION.' 1. 'WHETHER, ON THE FACTS AND IN THE CIRCUM STAN CES OF THE CASE AND IN LAW THE L D. CIT(A) ERRED IN ALLOWING THE APPEAL, WHEN THE DELHI HIGH COURT IN THE CASE OF CHARANJIV CHARITABLE TRUST AND KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS CIT 76 DTR (KER) 372 HAS DECIDED THE ISSUE I N THE FAVOUR OF THE DEPARTMENT AFTER CONSIDERING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD (199 ITR 43). 2. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE DEPRECIAT ION CLAIM OF THE ASSESSEE BY RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, IGNORING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT ON MERIT OF THE CASE, BUT DUE TO SMALLNESS OF TAX EFFECT APPEAL WAS NOT FILED BEFORE HON'BLE SUPREME COURT. ALSO, THE LD CIT(A) ERRED IN RELYING UPON THE JUDGMENT OF HON'BLE HIGH COURT IN THE CASE OF CIT VS. SHRI VILE - PARLE KELVANI MANDAL, WITHOUT APPRECIATING THE FACT THAT DEPARTMENT HAS NOT ACCEPTED THE DECISION ON MERIT AND FILED SLP, BUT SUBSEQUENTLY WITHDRAWN THE SAME AS THERE WAS NO CLAIM OF DEPRECIATION ON EXEMPTED ASSETS. MOREOVER, THE REVENUE HAS FILED SLPS ON THIS ISSUE IN OTHER CASES INCLUSIVE THE CASE OF G.D. BIRLA M EDICAL RESEARCH & EDUCATIONAL FOUNDATION (S.L.P.(C) NO. 24904 OF 2016(C.A.NO.8294 OF 2026) AND IN THIS CASE LEAVE HAS ITA 5578/MUM/2017 BEEN GRANTED BY THE HON'BLE APEX COURT AND IN ALL CASES ISSUE IS PENDING FOR ADJUDICATION BEFORE THE HON'BLE APEX COURT. 3' WHETHER ON THE FACTS OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT OF RS. 1,27,40,361/ - AND ALLOWING SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS.' 4 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT, IGNORING THE FACT THAT THERE WAS NO EXPRESS PROVISION IN THE I T ACT, 1961 PERMITTING ALLOWANCE OF SUCH CLAIM.' 5 WHETHER, ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT BY RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTI ON, IGNORING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT ON MERIT OF THE CASE, BUT DUE TO SMALLNESS OF TAX EFFECT APPEAL WAS NOT FILED BEFORE HON'BLE SUPREME COURT. HOWEVER, ON THIS ISSUE THE DEPARTMENT HAS FILED SLPS IN OTHER CASES BEFORE THE HON'BLE APEX COURT INCLUSIVE THE CASE OF MIDC {SLP (CIVIL) 9891 OF 2014), IN WHICH LEAVE HAS BEEN GRANTED AND THE ISSUE IS PENDING FOR ADJUDICATION BEFORE THE HON'BLE SUPREME COURT AND THE CASE HAS NOT REACHED FINAL ITY. 6 'THE APPELLANT PRAYS THAT THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS) - 1 , MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED'. 7 THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A. NEW GROUND WHICH MAY BE NECESSARY.' 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A TRUST REGISTERED WITH DIT(E), MUMBAI U/S. 12A OF THE ACT . T HE ASSESSEE TRUST IS ALSO REGISTERED WITH THE CHARITY COMMISSIONER, MUMBAI . THE ASSESSEE HAS CLAIMED AN EXEMPTION U/S 11 OF THE 1961 ACT. IN NUTSHELL , THE R EVENUE IS AGGRIEVED ON TWO COUNTS , FIRSTLY THAT THE AN AMOUNT BY WAY OF CAPITAL EXPENDITURE INCURRED ON ASSET ACQUIRED FOR THE OBJECTS OF THE TRUST WAS CLAIMED BY THE ASSES SEE AS AN APPLICATION OF INCOME AND ALSO SIMULTANEOUSLY WHILE COMPUTING INCOME OF THE ASSESSEE , THE ITA 5578/MUM/2017 ASSESSEE HAS ALSO CLAIMED AS DEDUCTION DEPRECIATION ON THESE CAPITAL ASSETS FROM THE INCOME OF THE ASSESSEE WHICH AS PER R EVENUE LED TO DOUBLE DEDUCTION O F THE CAPITAL EXPENDITURE INCURRED BY THE ASSESSEE FOR ACQUIRING ASSETS. SECONDLY, THE R EVENUE IS ALSO AGGRIEVED BY NOT ALLOWING THE CARRY FORWARD OF EXCESS EXPENDITURE OVER INCOME OF RS. 1,27,40,361/ - TO BE CARRIED FORWARD TO THE SUBSEQUENT YEARS FOR SE TTING IT OFF AGAINST INCOME OF SUBSEQUENT YEARS. THE AO HAS DECIDED BOTH THE ISSUES AGAINST THE ASSESSEE , VIDE ASSESSMENT ORDER DATED 16.03.2015 PASSED BY THE AO U/S 143(3) OF THE ACT, BUT LD.CIT(A) GRANTED RELIEF TO THE ASSESSEE VIDE APPELLATE ORDER DATE D 23.06.2017 BY FOLLOWING THE EARLIER YEARS ORDERS , WHEREIN LD. CIT(A) HELD AS UNDER: - 5.2 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, GONE THROUGH THE ASSESSMENT ORDER OF THE A.O AND THE SUBMISSIONS OF THE APPELLANT AND ALSO DISCUSSED THE CASE WITH THE AR OF THE APPELLANT. THE CONTENTIONS AND SUBMISSIONS OF THE APPELLANT ARE BEING DISCUSSED AND DECIDED HERE IN UNDER: I. AN IDENTICAL ISSUE HAS ARISEN IN THE APPEL L ANT'S OWN CASE FOR A.Y.2011 - 12 WHEREIN VIDE MY ORDER DATED 14.6.2016, T HE ISSUE HAS BEEN DECIDED OBSERVING AS UNDER. 'I, THE ASSESSING OFFICER HAS NOT TREATED THE DEPRECIATION AS APPLICATION OF INCOME ON THE GROUND THAT IT AMOUNTS TO DOUBLE DEDUCTION. APPELLANT HAS SUBMITTED THAT IN A NUMBER OF JUDGMENTS, DEPRECIATION HAD BE EN ALLOWED AS APPLICATION OF INCOME U/S. 11. CASE LAWS RELIED UPON BY THE ASSESSING OFFICER HAVE ALSO BEEN DISTINGUISHED. IN THIS REGARD I FIND THAT THE ISSUE IS DIRECTLY COVERED IN APPELLANT'S FAVOUR BY THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CAS E OF CIT VS. INSTITUTE OF BANKING PERSONNEL 264 ITR 110 WHERE IN THE HON'BLE COURT HAS OBSERVED AS UNDER : ' 4. QUESTION NO. 2 HEREIN IS IDENTICAL TO THE QUESTION WHICH WAS RAISED BEFORE THE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTI ON) V. FRAMJEE CAWASJEE INSTITUTE (1993) 109 CTR 463 (BOM). IN THAT CASE, THE FACTS WERE AS FOLLOWS: THE ASSESSEE WAS THE TRUST. IT DERIVED ITS INCOME FROM DEPRECIABLE ASSETS. THE ASSESSEE TOOK INTO ACCOUNT DEPRECIATION ON THOSE ASSETS IN COMPUTING THE INC OME OF ME TRUST. THE INCOME TAX OFFICER HELD THAT DEPREDATION COULD NOT BE TAKEN INTO ACCOUNT ITA 5578/MUM/2017 BECAUSE FULL CAPITAL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS. THE ASSESSEE WENT IN APPEAL BEFORE THE ASSISTANT APPELLATE COMMISSIONE R. 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 ACQUISITION OF THE ASSETS, WHAT HE REALLY MEANT WAS THAT THE AMOUNT SPENT ON ACQUIRING THOSE ASSE TS 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 CANNO T BE TAKEN INTO ACCOUNT. THIS VIEW OF THE TRIBUNAL HAS BEEN CONFIRMED BY, THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. HENCE, QUESTION NO. 2 IS COVERED BY THE DECISION OF THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. CONSEQUENTLY, QUESTION NO. 2 IS ANSWERED IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSES AND AGAINST, THE DEPARTMENT. II. IN A RECENT JUDGEMENT IN CASE OF DIRECTOR OF INCOME - TAX (EXEMPTIONS), MUMBAI V. SHRI VILE PA RLE KELAVANI MANDAL [2015] 58 TA XMANN.COM 288 HON'BLE BOMBAY HIGH COURT HELD : 'AS FAR AS QUESTION NO.4 IS CONCERNED, THIS COURT HAS REPEATEDLY HELD THAT THERE IS NOTHING LIKE DOUBLE DEDUCTION. WHEN THE ASSESSEE HAS ACQUIRED AN ASSET FROM THE INCOME OF THE TRUST AND THEREAFTER THE AMOUNT THAT IS CLAIMED IS THE DEPRECIATION ON THE USE OF THE ASSETS, SUCH DEPRECIATION CLAIM DOES NOT MEAN DOUBLE DEDUCTION. THE DEDUCTION EARLIER CLAIMED IS TOWARDS APPLICATION OF FUNDS OF THE TRUST FOR ACQUIRING ASSETS. THE LATTER IS DEPRECIATION AND IT IS PERMISSIBLE DEDUCTION CONSIDERING THE USE OF THE A SSETS. THIS HAS BEEN CLARIFIED REPEATEDLY BY THIS COURT. IF ANY REFERENCE IS REQUIRED THEN THE CASE OF CIT V, INSTITUTION OF BANKING PERSONNEL SELECTION (IB PS) [2003] 264 ITR 110/131 TAXMAN 386 (BOM.) IS ENOUGH.' III, RESPECTFULLY FOLLOWING THE ABOVE OBSERVATIONS OF HON'BLE JURISDICTIONAL! HIGH COURT, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF DEPRECIATION AS APPLICATION OF INCOME U/S. 11 OF THE I.T. ACT. IV. ACCORDINGLY, GROUND OF APPEAL NO.1 IS ALLOWED. III. AS THERE IS NO CHANGE IN TH E FACTS, OBSERVATIONS OF THE A.O IN HIS ORDER AND SUBMISSIONS OF THE APPELLANT AS COMPARED TO A.Y. 2011 - 12, FOLLOWING THE ABOVE ITA 5578/MUM/2017 OBSERVATIONS, THE A.O IS DIRECTED TO COMPLY WITH THE ABOVE DIRECTIONS FOR THIS YEAR AS WELL. IV. GROUND OF APPEAL N O. 1 IS THER EFORE, ALLOWED. ON THE SECOND ISSUE O F ALLOWABILITY OF CARRY FORWARD OF EXCESS OF EXPENDITURE OVER INCOME TO SUBSEQUENT YEARS FOR SET OFF AGAINST INCOME OF SUBSEQUENT YEARS, THE LEARNED CIT(A) GRANTED RELIEF TO THE ASSESSEE , BY HOLDING AS UNDER: 7.2 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, GONE THROUGH THE ASSESSMENT ORDER OF THE AO AND THE SUBMISSION S OF THE APPELLANT AND ALSO DISCUSSED THE CASE WITH THE AR OF THE APPELLANT. THE CONTENTIONS AND SUBMISSION OF THE APPELLANT ARE BEING DI SCUSSED AND DECIDED HERE IN UNDER: - I. AN IDENTICAL ISSUE HAS ARISEN IN THE APPELLANT'S OWN CASE FOR A.Y. 2011 - 12 WHEREIN VIDE MY ORDER DATED 14.6.2016, THE ISSUE HAS BEEN DECIDED OBSERVING AS UNDER : 'I. RELYING UPON THE JUDGEMENT OF HON'BLE JURISDICTIONAL HIGH COURT THE APPELLANT STATED THAT DEFICIT OF THE CURRENT YEAR IS REQUIRED TO BE CARRIED FORWARD TO THE SUBSEQUENT YEARS. ON PERUSAL OF THE FACTS I FIND THAT THE CASE OF APPELLANT IS SQUARELY COVERED BY THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL 264 ITR 110 WHEREIN THE HON. JURISDICTIONAL HIGH COURT HAS OBSERVED AS UNDER - ..,.........'5. 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 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 YEAR AND THAT UTILIZATION OF SUCH INCOME FOR MEETING THE EXPENDITURE OF EARLIER YEARS WOULD NOT AMOUNT TO APPLICATION OF INCOME FOR CHARITABLE OR RELIGIOUS PURPOSES. IN THE PRESENT CASE, THE ASSESSING OFFICER DID NOT AL LOW CARRY FORWARD OF THE EXCESS OF EXPENDITURE TO BE SET OFF AGAINST THE SURPLUS OF THE SUBSEQUENT YEARS ON THE GROUND THAT IN THE CASE OF A CHARITABLE TRUST, THEIR INCOME WAS ASSE SSABLE UNDER SELF - CONTAINED CODE MENTIONED IN SECTION ITA 5578/MUM/2017 11 TO SECTION 13 OF THE INCOME TAX ACT AND THAT THE INCOME OF THE CHARITABLE TRUST WAS NOT ASSESSABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS' UNDER SECTION 28 IN WHICH THE PROVISION FOR CARRY FOR WARD OF LOSSES WAS RELEVANT. THAT, IN THE CASE OF A CHARITABLE TRUST, THERE WAS NO PROVISION FOR CARRY FORWARD O F THE EXCESS OF EXPENDITURE OF EARLIER YEARS TO BE ADJUSTED AGAINST INCOME OF 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 COMMERCIAL PRINCIPLES AND IF COMMERCIAL PRINCIPLES ARE APP LIED THEN ADJUSTMENT OF EXPENSES INCURRED BY THE T RUST TO CHARITABLE AND RELIGIOUS PURPOSES IN THE EARLIER YEARS AG AINST THE INCOME EARNED BY THE TRUST IN THE SUBSEQUENT YEAR WILL HAVE TO BE REGARDED AS APPLICATION OF INCOME OF THE TRUST FOR CHARITABLE AND RELIGIOUS PURPOSES IN THE SUBSEQUENT YEAR IN WHICH ADJUSTMENT HAS BEEN MADE HAVING REGARD TO THE BENEVOLENT PROVIS IONS CONTAINED IN SECTION 11 OF THE ACT AND THAT SUCH ADJUSTMENT WILL HAVE TO BE EXCLUDED FROM THE INCO ME OF THE TRUST UNDER SECTION 11(1 )(A) OF THE ACT. OUR VIEW IS ALSO SUPPORTED BY THE JUDGMENT OF THE GUJA RAT HIGH COURT IN THE CASE OF CI T V. SHRI PLOT S WETAMBER MURTI PUJAK JAIN MANDAL (1995) 211 ITR 293 (GUJ ), ACCORDINGLY, WE ANSWER QUESTI ON NO. 3 IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT.' II. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN B Y THE HON. HIGH COURT AS ABOVE, THE AO IS DIRECTED TO ALLOW THE CARRY FORWARD OF DEFICIT IN THE SUCCEEDING YEARS AFTER DUE VERIFICATION OF FACTS. III '. GROUND OF APPEAL NO. 3 IS, THEREFORE, ALLOWED.' II. AS THERE IS NO CHANGE IN THE FACTS, OBSERVATIONS OF THE A.O IN HIS ORDER AND SUBMIS SIONS OF THE APPELLANT AS COMPARED TO A.Y. 2011 - 12, FOLLOWING THE ABOVE OBSERVATIONS, THE A.O IS DIRECTED TO COMPLY WITH THE ABOVE DIRECTIONS FOR THIS YEAR AS WELL. III. GROUND OF APPEAL NO. 3 IS THEREFORE, ALLOWED. 4. THE REVENUE IS AGGRIEVED BY THE RELIEF GRANTED TO THE ASSESSEE BY LD. CIT(A) AND HAS FILED AN APPEAL WITH THE TRIBUNAL . T HE LD. DR RELIED UPON THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT THE ISSUE IS COVERED BY THE TRIBUNAL DECISI ON IN ASSESSE E S OWN CASE IN ITA NO. 5279/MUM / 2016 FOR AY 2011 - 12 ITA 5578/MUM/2017 WHEREIN BOTH THE AFORESAID ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AND R EVENUE APPEAL STOOD DISMISSED BY TRIBUNAL , VIDE APPELLATE ORDERS DATED 31.10.2017 PASSED BY TRIBUNAL AS UNDER: - THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 1, MUMBAI DATED 14.06.2016 PERTAINING TO THE ASSESSMENT YEAR 2011 - 12, WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 15.01.2014 UNDER SECTION 143(3 ) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN ITS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1.WHETHER ON THE FACTS OF THE CASE AND IN LAW THE ID. CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON ACCOUNT OF DISALLOWING DEPRECIATION ON FIXED ASSETS OF RS. 21,00,193/ - IN CONTRAVENTION OF THE DECISION OF ESCORTS LTD. VS. UOI 199 ITR 43 WHEREIN IT WAS HELD THAT SINCE SECTION 11 OF THE INCOME TAX ACT PROVIDES FOR DEDUCTION CAPITAL EXPENDITURE INCURRED ON ASSETS ACQUIRED FOR T HE OBJECTS OF THE TRUST AS APPLICATION AND DOES NOT SPECIFICALLY & EXPRESSLY PROVIDE FOR DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION ON THE SAME VERY ASSETS ACQUIRED FROM SUCH CAPITAL EXPENDITURE, NO DEDUCTION SHALL BE ALLOWED U/S 32 FOR THE SAME OR ANY OT HER PREVIOUS YEAR IN RESPECT OF THAT ASSET AS IT AMOUNTS TO CLAIMING A DOUBLE DEDUCTION.' 2. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE IDCIT(A) ERRED IN ALLOWING THE APPEAL, WHEN THE DELHI HIGH COURT IN THE CASE OF CHARANJIV CHARITABLE TRUST AND KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS CIT 76 DTR (KER) 372 HAS DECIDED THE ISSUE IN THE FAVOUR OF THE DEPARTMENT AFTER CONSIDERING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. ( 199 ITR 43 )' 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ID CIT(A) ERRED IN RELYING UPON THE JUDGMENT OF HON'BLE HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION WITHOUT APPRECIATING THE FACT THAT DEPARTMENT HAS NOT ACCEPTED THE DECISION ON MERIT AND ALSO WITHOUT APPRECIATING THE FACT THAT THE HON'BLE HIGH COURT WHILE DECIDING THE ABOVE SAID CASE HAS NOT TAKEN INTO ACCOUNT THE JUDGMENT OF HON'BLE SUPREME IN THE CASE OF ESCORT LTD. WHICH IS IN THE F AVOUR OF DEPARTMENT.' 4. 'WHETHER ON THE FACTS OF THE CASE AND IN LAW THE ID. CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT OF RS. 15,71,262/ - AND ALLOWING SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS.' 5. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT, IGNORING THE FACT ITA 5578/MUM/2017 THAT THERE WAS NO EXPRESS PROVISION IN THE I T ACT, 1961 PERMITTING ALLOWANCE OF SUCH CLAIM.' 6. 'WHE THER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT BY RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKI NG PERSONNEL SELECTION, IGNORING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT ON MERIT OF THE CASE' 7. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - I, MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 8. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 5. ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE DISPUTE INVOLVED IN THIS APPEAL IS ON TWO ISSUES. FIRSTLY, THE REVENUE IS AGGRIEVED BY THE DECISION OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE BENEFIT OF DEPRECIATION. SECONDLY, THE GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE CIT(A) IN ALLOWING THE ASSESSEE THE BENEFIT OF CARRY FORWARD OF THE DEFICIT FOR FUTURE SET - OFF. 6. IN THIS BACKGROUND, NOW WE MAY REFER TO THE RELEVANT FACTS. THE RESPONDENT - ASSESSEE IS A CHARITABLE ORGANISATION REGISTERED U/S 12A OF THE ACT AND IS ENGAGED IN CARRYING ON ACTIVITIES OF C HARITABLE NATURE. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD CLAIMED DEPRECIATION ALLOWANCE OF RS.21,00,193/ - ON THE COST OF FIXED ASSETS, WHEREAS SUCH COST OF FIXED ASSETS HAS ALSO BEEN TAKEN AS AN APPLICATION OF INCOME WHILE COMPUTING THE TOTAL INCO ME. ACCORDING TO THE ASSESSING OFFICER, THIS AMOUNTED TO A DOUBLE DEDUCTION AND HE, THEREFORE, DISALLOWED THE ASSESSEES CLAIM FOR DEPRECIATION. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, 264 ITR 110 (BOM). 7. BEFORE US, THE ONLY PLEA OF THE DEPARTMENT IS THAT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) HAS NOT BEEN AC CEPTED BY THE DEPARTMENT ON MERITS AND THAT ALLOWING OF DEPRECIATION WOULD AMOUNT TO A DOUBLE DEDUCTION, WHICH WAS IMPERMISSIBLE HAVING REGARD TO THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD., 199 ITR 43 (SC). 8. WE FIND THAT THE D ECISION IN THE CASE OF ESCORTS LTD. (SUPRA) BEING RELIED UPON BY THE REVENUE BEFORE US HAS BEEN CONSIDERED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF INDRAPRASTHA CANCER SOCIETY, (2014) 112 DTR 345 DATED 18.11.2014, WHEREIN IT HAS BEEN OPINED THAT THE ALLOWANCE OF DEPRECIATION IN SIMILAR SITUATION WOULD NOT AMOUNT TO A DOUBLE DEDUCTION. FURTHER, IT IS NOTICED THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF VISHWA JAGRITI MISSION, ITA NO. 140/2012 DATED 29.3.2012 ALSO ALLOWED A SIMILAR CLAIM AFTER ANALY SING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. (SUPRA), WHICH IS BEING RELIED UPON BY THE REVENUE. IT IS ALSO ITA 5578/MUM/2017 NOTABLE THAT THE HON'BLE SUPREME COURT HAS ALSO DISMISSED THE SLP FILED BY THE DEPARTMENT AGAINST THE SAID DECISION OF THE HON'BLE DELHI HIGH COURT VIDE SLP NO. 19321 OF 2013. WE FIND THAT THE HON'BLE BOMBAY HIGH COURT SUBSEQUENT TO THE DECISION IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) CONSIDERED A SIMILAR ARGUMENT OF THE REVENUE IN THE CASE OF M/S. MUMBAI EDUCATION TRUST, ITA NO. 11/2014 DATED 3.5.2016 AND ALLOWED THE CLAIM OF THE ASSESSEE. IN FACT, THE GROUNDS OF APPEAL URGED BY THE REVENUE BEFORE THE HON'BLE HIGH COURT IN THE CASE OF MUMBAI EDUCATION TRUST (SUPRA), WHICH READ AS UNDER : - (A) WHE THER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW THE CLAIM OF DEPRECIATION RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONN EL SERVICES REPORTED IN 264 ITR 110 (BOM) IGNORING THE RATIO OF HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF ESCORTS LTD. V/S. UNION OF INDIA (199 ITR 43) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT S PECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION? B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW TO CARRY FORWARD OF DEFICIT OF EARLIER YEARS R ELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) WHILE THE REVENUE DID NOT FILE SLP AGAINST THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR11 0 (BOM) DUE TO LOW TAX EFFECT?. STAND ON SAME FOOTING AS ARE BEING CANVASSED BEFORE US IN THE INSTANT CASE. THUS, THERE IS NO ERROR ON THE PART OF THE CIT(A) IN FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PE RSONNEL SELECTION (SUPRA) AND ALLOWING THE STAND OF THE ASSESSEE. THE OTHER ARGUMENT TAKEN BY THE REVENUE THAT ITS SLP FILED BEFORE THE HON'BLE SUPREME COURT IS PENDING ON A SIMILAR ISSUE IS OF NO CONSEQUENCE INASMUCH AS THE BINDING JUDGMENTS OF THE HON'BL E BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AS WELL AS IN THE CASE OF M/S. MUMBAI EDUCATION TRUST (SUPRA) CONTINUE TO SUBSIST. THEREFORE, IN THIS BACKGROUND, WE FIND NO MERIT IN THE GROUND RAISED BY THE REVENUE ON TH E FIRST ISSUE AND THE SAME IS ACCORDINGLY DISMISSED. 9. SIMILARLY, THE SECOND ISSUE RAISED BY THE REVENUE IS WITH REGARD TO CARRY FORWARD OF THE DEFICIT OF RS.15,71,262/ - TO BE SET - OFF AGAINST THE FUTURE INCOME. ON THIS ASPECT ALSO, CIT(A) HAS ALLOWED THE CLAIM FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA); IN FACT, SIMILAR SITUATION HAS BEEN FURTHER AFFIRMED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF M/S. MUMBAI EDUCATION TRUST (SUPRA). THEREFORE, ON THIS ASPECT ALSO, WE FIND NO ERROR ON THE PART OF THE CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE, WHICH WE HEREBY AFFIRM. ITA 5578/MUM/2017 10. RESULTANTLY, APPEAL OF THE REVENUE IS DISMISSED, AS ANNOUNCED IN THE COURT IN THE PRESENCE OF BOTH THE P ARTIES ON THE CONCLUSION OF HEARING ON 31ST OCTOBER, 2017. IT IS FURTHER CONTENDED BY LEARNED COUNSEL FOR THE ASSESSEE THAT HONBLE S UPREME COURT VIDE ORDERS DATED 1 3.12. 2017 IN CIT V. RAJASTHAN & GUJARATI CHARITABLE FOU NDATION REPORTED IN (2018) 402 ITR 441(SC): (2018) 89 TAXMANN.COM 127(SC) HAS DECIDED BOTH THE ISSUES IN FAVOUR OF THE TAX - PAYER , BY HOLDING AS UNDER; - THESE ARE THE PETITIONS AND APPEALS FILED BY THE INCOME TAX DEPARTMENT AGAINST THE ORDERS PASSED BY VARIOUS HIGH COURTS GRANTING BENEFIT OF DEPRECIATION ON THE ASSETS ACQUIRED BY THE RESPONDENTS - ASSESSEES. IT IS A MATTER OF RECORD THAT ALL THE ASSESSEES AR E CHARITABLE INSTITUTIONS REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO AS 'ACT'). FOR THIS REASON, IN THE PREVIOUS YEAR TO THE YEAR WITH WHICH WE ARE CONCERNED AND IN WHICH YEAR THE DEPRECIATION WAS CLAIMED, THE ENTIRE EXPEND ITURE INCURRED FOR ACQUISITION OF CAPITAL ASSETS WAS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES UNDER SECTION 11(1)(A) OF THE ACT. THE VIEW TAKEN BY THE ASSESSING OFFICER IN DISALLOWING THE DEPRECIATION WHICH WAS CLAIMED UNDER SECTION 32 OF T HE ACT WAS THAT ONCE THE CAPITAL EXPENDITURE IS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES, THE ASSESSEES HAD VIRTUALLY ENJOYED A 100 PER CENT WRITE OFF OF THE COST OF ASSETS AND, THEREFORE, THE GRANT OF DEPRECIATION WOULD AMOUNT TO GIVING DO UBLE BENEFIT TO THE ASSESSEE. THOUGH IT APPEARS THAT IN MOST OF THESE CASES, THE CIT (APPEALS) HAD AFFIRMED THE VIEW, BUT THE ITAT REVERSED THE SAME AND THE HIGH COURTS HAVE ACCEPTED THE DECISION OF THE ITAT THEREBY DISMISSING THE APPEALS OF THE INCOME TAX DEPARTMENT. FROM THE JUDGMENTS OF THE HIGH COURTS, IT CAN BE DISCERNED THAT THE HIGH COURTS HAVE PRIMARILY FOLLOWED THE JUDGMENT OF THE BOMBAY HIGH COURT IN CIT V. INSTITUTE OF BANKING PERSONNEL SELECTION (IBPS)' ((2003) 131 TAXMAN 386 . IN THE SAID JUDG MENT, THE CONTENTION OF THE DEPARTMENT PREDICATED ON DOUBLE BENEFIT WAS TURNED DOWN IN THE FOLLOWING MANNER: 3. AS STATED ABOVE, THE FIRST QUESTION WHICH REQUIRES CONSIDERATION BY THIS COURT IS: WHETHER DEPRECIATION WAS ALLOWABLE ON THE ASSETS, THE COST OF WHICH HAS BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTION 11 IN THE PAST YEARS? IN THE CASE OF CIT V. MUNISUVRAT JAIN 1994 TAX LAW REPORTER, 1084 THE FACTS WERE AS FOLLOWS. THE ASSESSEE WAS A CHARITABLE TRUST. IT WAS REGISTERED AS A PUBLIC CHARI TABLE TRUST. IT WAS ALSO REGISTERED WITH THE COMMISSIONER OF INCOME TAX, PUNE. THE ASSESSEE DERIVED INCOME FROM THE TEMPLE PROPERTY WHICH WAS A TRUST PROPERTY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEARS 1977 - 78, 1978 - 79 AND 1979 - 80, T HE ASSESSEE CLAIMED DEPRECIATION ON T HE VALUE OF THE BUILDING @2 % AND THEY ALSO CLAIMED DEPRECIATION ON FURNITURE @ 5%. THE QUESTION WHICH AROSE BEFORE THE COURT FOR DETERMINATION WAS : WHETHER DEPRECIATION COULD BE DENIED TO THE ASSESSEE, AS EXPENDITURE ON ITA 5578/MUM/2017 ACQUISITION OF THE ASSETS HAD BEEN TREATED AS APPLICATION OF INCOME IN THE YEAR OF ACQUISITION? IT WAS HELD BY THE BOMBAY HIGH COURT THAT SECTION 11 OF THE INCOME TAX ACT MAKES PROVISION IN RESPECT OF COMPUTATION OF INCOME OF THE TRUST FROM THE PROPER TY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES AND IT ALSO PROVIDES FOR APPLICATION AND ACCUMULATION OF INCOME. ON THE OTHER HAND, SECTION 28 OF THE INCOME TAX ACT DEALS WITH CHARGEABILITY OF INCOME FROM PROFITS AND GAINS OF BUSINESS AND SECTION 29 PROVIDES THAT INCOME FROM PROFITS AND GAINS OF BUSINESS SHALL BE COMPUTED IN ACCORDANCE WITH SECTION 30 TO SECTION 43C. THAT, SECTION 32(1) OF THE ACT PROVIDES FOR DEPRECIATION IN RESPECT OF BUILDING, PLANT AND MACHINERY OWNED BY THE ASSESSEE AND USED FOR BUSINESS PURPOSES. IT FURTHER PROVIDES FOR DEDUCTION SUBJECT TO SECTION 34. IN THAT 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 IN COME TAX ACT AND NOT UNDER GENERAL PRINCIPLES. THE COURT REJECTED THIS ARGUMENT. IT WAS HELD THAT NORMAL DEPRECIATION CAN BE CONSIDERED AS A LEGITIMATE DEDUCTION IN COMPUTING THE REAL INCOME OF THE ASSESSEE ON GENERAL PRINCIPLES OR UNDER SECTION 11(1)(A) O F THE INCOME TAX ACT THE COURT REJECTED THE ARGUMENT ON BEHALF OF THE REVENUE THAT SECTION 32 OF THE INCOME TAX ACT WAS THE ONLY SECTION GRANTING BENEFIT OF DEDUCTION ON ACCOUNT OF DEPRECIATION. IT WAS HELD THAT INCOME OF A CHARITABLE TRUST DERIVED FROM BU ILDING, PLANT AND MACHINERY AND FURNITURE WAS LIABLE TO BE COMPUTED IN 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 INCOME DERIVED FROM BUSINESS OR PROFESSION IS NOT APPLICABLE. HOWEVER, THE INCOME OF THE TRUST IS REQUIRED TO BE COMPUTED UNDER SECTION 11 ON COMMERCIAL PRINCIPLES AFTER PROVIDI NG FOR ALLOWANCE FOR NORMAL DEPRECIATION AND DEDUCTION THEREOF FROM GROSS INCOME OF THE TRUST. IN VIEW OF THE AFORESATATED JUDGMENT OF THE BOMBAY HIGH CURT, WE ANSWER QUESTION NO. 1 IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTM ENT. 4. QUESTION NO. 2 HEREIN IS IDENTICAL TO THE QUESTION WHICH 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 THAT CASE, THE FACTS WERE AS FOLLOWS: THE ASSESS EE WAS THE TRUST. IT DERIVED ITS INCOME FROM DEPRECIABLE ASSETS. THE ASSESSEE TOOK INTO ACCOUNT DEPRECIATION ON THOSE ASSETS IN COMPUTING THE INCOME OF THE TRUST. THE ITO HELD THAT DEPRECIATION COULD NOT BE TAKEN INTO ACCOUNT BECAUSE, FULL CAPITAL EXPENDIT URE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS. THE ASSESSEE WENT IN APPEAL BEFORE THE ASSISTANT APPELLATE COMMISSIONER. THE APPEAL WAS REJECTED. THE TRIBUNAL, HOWEVER, TOOK THE VIEW THAT WHEN THE ITO STATED THAT FULL EXPENDITURE HAD BEEN AL LOWED IN THE YEAR OF ACQUISITION OF THE ITA 5578/MUM/2017 ASSETS, WHAT HE REALLY MEANT WAS THAT THE AMOUNT 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 TRIBUNAL HAS BEEN CONFIRMED BY THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. HENCE, QUESTION NO. 2 IS COVERED BY THE DECISION OF THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. CONSEQUENTLY, QUESTION NO. 2 IS ANSWERED IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT.' 2. AFTER HEARING LEARNED COUNSEL FOR THE PARTIES, WE ARE O F THE OPINION THAT THE AFORESAID VIEW TAKEN BY THE BOMBAY HIGH COURT CORRECTLY STATES THE PRINCIPLES OF LAW AND THERE IS NO NEED TO INTERFERE WITH THE SAME. 3. IT MAY BE MENTIONED THAT MOST OF THE HIGH COURTS HAVE TAKEN THE AFORESAID VIEW WITH ONLY EXCEPTI ON THERETO BY THE HIGH COURT OF KERALA WHICH HAS TAKEN A CONTRARY VIEW IN 'LISSIE MEDICAL INSTITUTIONS V. CIT(2012) 24 TAXMANN.COM 9/209 TAXMAN 19( MAG) 348 ITR 344. . IT MAY ALSO BE MENTIONED AT THIS STAGE THAT THE LEGISLATURE, REALISING THAT THERE WAS NO SPECIFIC PROVISION IN THIS BEHALF IN THE INCOME TAX ACT, HAS MADE AMENDMENT IN SECTION 11(6) OF THE ACT VIDE FINANCE ACT NO. 2/2014 WHICH BECAME EFFECTIVE FROM THE ASSESSMENT YEAR 2015 - 2016. THE DELHI HIGH COURT HAS TAKEN THE VIEW AND RIGHTLY SO, THAT THE SAID AMENDMENT IS PROSPECTIVE IN NATURE. IT ALSO FOLLOWS THAT ONCE ASSESSEE IS ALLOWED DEPRECIATION, HE SHALL BE ENTITLED TO CARRY FORWARD THE DEPRECIATION AS WELL. FOR THE AFORESAID REASONS, WE AFFIRM THE VIEW TAKEN BY THE HIGH COURTS IN THESE CASES AND DISMISS THESE MATTERS. IT IS CLAIMED THAT ON BOTH THE ISSUES , THE HONBLE SUPREME COURT HAS HELD IN FAVOUR OF THE TAX - PAYER AND HENCE IT IS PRAYED BY LEARNED COUNSEL F OR THE ASSESSEE THAT IN VIEW OF AFORESAID DECISION OF HONBLE SUPREME COURT IN THE CASE OF RAJASTHAN AND GUJARATI CHARITABLE FOUNDATION POONA(SUPRA) ON BOTH THE ISSUES IN FAVOUR OF THE TAX - PAYER , THE ISSUES IS NO MORE RES I NTEGRA AND THEY BE ADJUDICATED IN FAVOUR OF THE ASSESSEE . 5. WE HAVE CONSIDERED RIVAL CONTENTION S AND PERUSED THE MATERIAL ON RECORD INCLUDING ORDERS OF THE AUTHORITIES BELOW AND CITED CASE LAWS. W E HAVE OBSERVED THAT THE ASSESSEE IS A TRUST REGISTERED WITH DIT(E), MUMBAI U/S. 12A OF THE ACT . THE ASSESSEE TRUST IS ALSO REGISTERED WITH THE CHARITY COM MISSIONER, MUMBAI . THE ASSESSEE HAS CLAIMED AN EXEMPTION U/S 11 OF THE 1961 ACT. THE ASSESSEE INCURRED CAPITAL EXPENDITURE TOWARDS ACQUIRING ITA 5578/MUM/2017 ASSETS FOR OBJECTS OF THE ASSESSEE WHICH WAS CLAIMED AS AN APPLICATION OF THE INCOME . THE ASSESSEE HAS ALSO SIMUL TANEOUSLY CLAIMED DEPRECIATION ON THE SAID CAPITAL EXPENDITURE INCURRED FOR ACQUIRING ASSETS FOR OBJECTS OF THE ASSESSEE WHICH AS PER R EVENUE HAD LED TO DOUBLE DEDUCTION AND SECONDLY THE ASSESSEE HAS ALSO CLAIMED CARRY FORWARD OF EXCESS OF EXPENDITURE OVE R INCOME TO BE SET OFF AGAINST INCOME OF THE ASSESSEE FOR SUBSEQUENT YEARS . W E HAVE OBSERVED THAT THE ISSUES IS NO MORE RES INTEGRA AS HONBLE SUPREME COURT IN THE CASE OF RAJASTHAN & GUJARATI CHARITABLE TRUST (SUPRA) HAS DECIDED BOTH THESE ISSUES IN FAV OUR OF THE TAX - PAYER AND BOTH THE ISSUES ARE NO MORE RES INTEGRA , BY HOLDING AS UNDER; - THESE ARE THE PETITIONS AND APPEALS FILED BY THE INCOME TAX DEPARTMENT AGAINST THE ORDERS PASSED BY VARIOUS HIGH COURTS GRANTING BENEFIT OF DEPRECIATION ON THE ASSE TS ACQUIRED BY THE RESPONDENTS - ASSESSEES. IT IS A MATTER OF RECORD THAT ALL THE ASSESSEES ARE CHARITABLE INSTITUTIONS REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO AS 'ACT'). FOR THIS REASON, IN THE PREVIOUS YEAR TO THE YEAR W ITH WHICH WE ARE CONCERNED AND IN WHICH YEAR THE DEPRECIATION WAS CLAIMED, THE ENTIRE EXPENDITURE INCURRED FOR ACQUISITION OF CAPITAL ASSETS WAS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES UNDER SECTION 11(1)(A) OF THE ACT. THE VIEW TAKEN BY T HE ASSESSING OFFICER IN DISALLOWING THE DEPRECIATION WHICH WAS CLAIMED UNDER SECTION 32 OF THE ACT WAS THAT ONCE THE CAPITAL EXPENDITURE IS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES, THE ASSESSEES HAD VIRTUALLY ENJOYED A 100 PER CENT WRITE O FF OF THE COST OF ASSETS AND, THEREFORE, THE GRANT OF DEPRECIATION WOULD AMOUNT TO GIVING DOUBLE BENEFIT TO THE ASSESSEE. THOUGH IT APPEARS THAT IN MOST OF THESE CASES, THE CIT (APPEALS) HAD AFFIRMED THE VIEW, BUT THE ITAT REVERSED THE SAME AND THE HIGH CO URTS HAVE ACCEPTED THE DECISION OF THE ITAT THEREBY DISMISSING THE APPEALS OF THE INCOME TAX DEPARTMENT. FROM THE JUDGMENTS OF THE HIGH COURTS, IT CAN BE DISCERNED THAT THE HIGH COURTS HAVE PRIMARILY FOLLOWED THE JUDGMENT OF THE BOMBAY HIGH COURT IN CIT V . INSTITUTE OF BANKING PERSONNEL SELECTION (IBPS)' ((2003) 131 TAXMAN 386 . IN THE SAID JUDGMENT, THE CONTENTION OF THE DEPARTMENT PREDICATED ON DOUBLE BENEFIT WAS TURNED DOWN IN THE FOLLOWING MANNER: 3. AS STATED ABOVE, THE FIRST QUESTION WHICH REQUIRES C ONSIDERATION BY THIS COURT IS: WHETHER DEPRECIATION WAS ALLOWABLE ON THE ASSETS, THE COST OF WHICH HAS BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTION 11 IN THE PAST YEARS? IN THE CASE OF CIT V. MUNISUVRAT JAIN 1994 TAX LAW REPORTER, 1084 THE FAC TS WERE AS FOLLOWS. THE ASSESSEE WAS A CHARITABLE TRUST. IT WAS REGISTERED AS A PUBLIC CHARITABLE TRUST. IT WAS ALSO REGISTERED WITH THE COMMISSIONER OF INCOME TAX, PUNE. THE ASSESSEE DERIVED INCOME FROM THE TEMPLE PROPERTY WHICH WAS A TRUST PROPERTY. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEARS 1977 - 78, 1978 - 79 AND 1979 - 80, THE ASSESSEE ITA 5578/MUM/2017 CLAIMED DEPRECIATION ON T HE VALUE OF THE BUILDING @2 % AND THEY ALSO CLAIMED DEPRECIATION ON FURNITURE @ 5%. THE QUESTION WHICH AROSE BEFORE THE COURT FOR DETERMINATION WAS : WHETHER DEPRECIATION COULD BE DENIED TO THE ASSESSEE, AS EXPENDITURE ON ACQUISITION OF THE ASSETS HAD BEEN TREATED AS APPLICATION OF INCOME IN THE YEAR OF ACQUISITION? IT WAS HELD BY THE BOMBAY HIGH COURT THAT SECTION 11 OF THE INCO ME TAX ACT MAKES PROVISION IN RESPECT OF COMPUTATION OF INCOME OF THE TRUST FROM THE PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES AND IT ALSO PROVIDES FOR APPLICATION AND ACCUMULATION OF INCOME. ON THE OTHER HAND, SECTION 28 OF THE INCOME TAX ACT DE ALS WITH CHARGEABILITY OF INCOME FROM PROFITS AND GAINS OF BUSINESS AND SECTION 29 PROVIDES THAT INCOME FROM PROFITS AND GAINS OF BUSINESS SHALL BE COMPUTED IN ACCORDANCE WITH SECTION 30 TO SECTION 43C. THAT, SECTION 32(1) OF THE ACT PROVIDES FOR DEPRECIATION IN RESPECT OF BUILDING, PLANT AND MACHINERY OWNED BY THE ASSESSEE AND USED FOR BUSINESS PURPOSES. IT FURTHER PROVIDES FOR DEDUCTION SUBJECT TO SECTION 34. IN THAT 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 GENERAL PRINCIPLES. THE C OURT REJECTED THIS ARGUMENT. IT WAS HELD THAT NORMAL DEPRECIATION CAN BE CONSIDERED AS A LEGITIMATE DEDUCTION IN COMPUTING THE REAL INCOME OF THE ASSESSEE ON GENERAL PRINCIPLES OR UNDER SECTION 11(1)(A) OF THE INCOME TAX ACT THE COURT REJECTED THE ARGUMENT ON BEHALF OF THE REVENUE THAT SECTION 32 OF THE INCOME TAX ACT WAS THE ONLY SECTION GRANTING BENEFIT OF DEDUCTION 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 IN 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 DEPRE CIATION FOR COMPUTATION OF INCOME DERIVED FROM BUSINESS OR PROFESSION IS NOT APPLICABLE. 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 DEDUCTI ON THEREOF FROM GROSS INCOME OF THE TRUST. IN VIEW OF THE AFORESATATED JUDGMENT OF THE BOMBAY HIGH CURT, WE ANSWER QUESTION NO. 1 IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 4. QUESTION NO. 2 HEREIN IS IDENTICAL TO THE QU ESTION WHICH 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 THAT CASE, THE FACTS WERE AS FOLLOWS: THE ASSESSEE WAS THE TRUST. IT DERIVED ITS INCOME FROM DEPRECI ABLE ASSETS. THE ASSESSEE TOOK INTO ACCOUNT DEPRECIATION ON THOSE ASSETS IN COMPUTING THE INCOME OF THE TRUST. THE ITO HELD THAT DEPRECIATION COULD NOT BE TAKEN INTO ACCOUNT BECAUSE, FULL CAPITAL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF T HE ITA 5578/MUM/2017 ASSETS. THE ASSESSEE WENT IN APPEAL BEFORE THE ASSISTANT APPELLATE COMMISSIONER. THE APPEAL WAS REJECTED. THE TRIBUNAL, HOWEVER, TOOK THE VIEW THAT WHEN THE ITO STATED THAT FULL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS, WHAT HE REALLY MEANT WAS THAT THE AMOUNT 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 TRIBUNAL HAS BEEN CONFIRMED BY THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. HENCE, QUESTION NO. 2 IS COVERED BY THE DECISION OF THE BOMBAY HIGH COUR T IN THE ABOVE JUDGMENT. CONSEQUENTLY, QUESTION NO. 2 IS ANSWERED IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT.' 2. AFTER HEARING LEARNED COUNSEL FOR THE PARTIES, WE ARE OF THE OPINION THAT THE AFORESAID VIEW TAKEN BY THE B OMBAY HIGH COURT CORRECTLY STATES THE PRINCIPLES OF LAW AND THERE IS NO NEED TO INTERFERE WITH THE SAME. 3. IT MAY BE MENTIONED THAT MOST OF THE HIGH COURTS HAVE TAKEN THE AFORESAID VIEW WITH ONLY EXCEPTION THERETO BY THE HIGH COURT OF KERALA WHICH HAS TAK EN A CONTRARY VIEW IN 'LISSIE MEDICAL INSTITUTIONS V. CIT(2012) 24 TAXMANN.COM 9/209 TAXMAN 19( MAG) 348 ITR 344. . IT MAY ALSO BE MENTIONED AT THIS STAGE THAT THE LEGISLATURE, REALISING THAT THERE WAS NO SPECIFIC PROVISION IN THIS BEHALF IN THE INCOME TAX ACT, HAS MADE AMENDMENT IN SECTION 11(6) OF THE ACT VIDE FINANCE ACT NO. 2/2014 WHICH BECAME EFFECTIVE FROM THE ASSESSMENT YEAR 2015 - 2016. THE DELHI HIGH COURT HAS TAKEN THE VIEW AND RIGHTLY SO, THAT THE SAID AMENDMENT IS PROSPECTIVE IN NATURE. IT ALSO FOLLOWS THAT ONCE ASSESSEE IS ALLOWED DEPRECIATION, HE SHALL BE ENTITLED TO CARRY FORWARD THE DEPRECIATION AS WELL. FOR THE AFORESAID REASONS, WE AFFIRM THE VIEW TAKEN BY THE HIGH COURTS IN THESE CASES AND DISMISS THESE MATTERS. WE HAVE ALSO NOTED THAT AMENDMENT WAS BROUGHT BY F INANCE ACT NO. 2/2014 IN SECTION 11(6) OF THE 1961 ACT WHICH AMEND MENT IS HELD TO BE EFFECTIVE FROM 01.04. 2015 AND SHALL BE PROSPECTIVE AND APPLICABLE FROM AY 2015 - 16 , AS AFFIRMED BY HONBLE SUPREME COURT IN THE CASE OF RAJASTHAN & GUJARATI CHARITABLE TRUST(SUPRA) . WE ARE PRESENTLY CONCERNED WITH AY 2012 - 13. WE HAVE ALSO OBSERVED THAT THE TRIBUNAL IN ASSESSEE S OWN CASE HAS DECIDED BOTH THE ISSUES IN FAVOUR OF THE A SSESSEE ITA 5578/MUM/2017 IN ITA NO. 5279/MUM/2016 FOR AY 2011 - 12 VIDE ORDERS DATED 31.10.2017, BY HOLDING AS UNDER: - THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 1, MUMBAI DATED 14.06.2016 PERTAINING TO THE ASSESSMENT YEAR 2011 - 12, WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER D ATED 15.01.2014 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN ITS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1.WHETHER ON THE FACTS OF THE CASE AND IN LAW THE ID. CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON ACCOUNT OF DISALLOWING DEPRECIATION ON FIXED ASSETS OF RS. 21,00,193/ - IN CONTRAVENTION OF THE DECISION OF ESCORTS LTD. VS. UOI 199 ITR 43 WHEREIN IT WAS HELD THAT SINCE SECTION 11 OF THE INCOME TAX ACT PROVIDES FOR DEDUCTION CAPITAL EXPENDITUR E INCURRED ON ASSETS ACQUIRED FOR THE OBJECTS OF THE TRUST AS APPLICATION AND DOES NOT SPECIFICALLY & EXPRESSLY PROVIDE FOR DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION ON THE SAME VERY ASSETS ACQUIRED FROM SUCH CAPITAL EXPENDITURE, NO DEDUCTION SHALL BE AL LOWED U/S 32 FOR THE SAME OR ANY OTHER PREVIOUS YEAR IN RESPECT OF THAT ASSET AS IT AMOUNTS TO CLAIMING A DOUBLE DEDUCTION.' 2. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE IDCIT(A) ERRED IN ALLOWING THE APPEAL, WHEN THE DELHI HIGH COURT IN THE CASE OF CHARANJIV CHARITABLE TRUST AND KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS CIT 76 DTR (KER) 372 HAS DECIDED THE ISSUE IN THE FAVOUR OF THE DEPARTMENT AFTER CONSIDERING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. ( 199 ITR 43 )' 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ID CIT(A) ERRED IN RELYING UPON THE JUDGMENT OF HON'BLE HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION WITHOUT APPRECIATING THE FACT THAT DEPARTMENT HAS NOT ACCEPTED THE DECISION ON MERIT AND ALSO WITHOUT APPRECIATING THE FACT THAT THE HON'BLE HIGH COURT WHILE DECIDING THE ABOVE SAID CASE HAS NOT TAKEN INTO ACCOUNT THE JUDGMENT OF HON'BLE SUPREME IN THE CASE OF ES CORT LTD. WHICH IS IN THE FAVOUR OF DEPARTMENT.' 4. 'WHETHER ON THE FACTS OF THE CASE AND IN LAW THE ID. CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT OF RS. 15,71,262/ - AND ALLOWING SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS.' 5. 'WHETHE R, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT, IGNORING THE FACT THAT THERE WAS NO EXPRESS PROVISION IN THE I T ACT, 1961 PERMITTING ALLOWAN CE OF SUCH CLAIM.' ITA 5578/MUM/2017 6. 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT BY RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, IGNORING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT ON MERIT OF THE CASE' 7. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPE ALS) - I, MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 8. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 5. ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE DISP UTE INVOLVED IN THIS APPEAL IS ON TWO ISSUES. FIRSTLY, THE REVENUE IS AGGRIEVED BY THE DECISION OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE BENEFIT OF DEPRECIATION. SECONDLY, THE GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE CIT(A ) IN ALLOWING THE ASSESSEE THE BENEFIT OF CARRY FORWARD OF THE DEFICIT FOR FUTURE SET - OFF. 6. IN THIS BACKGROUND, NOW WE MAY REFER TO THE RELEVANT FACTS. THE RESPONDENT - ASSESSEE IS A CHARITABLE ORGANISATION REGISTERED U/S 12A OF THE ACT AND IS ENGAGED IN CARRYING ON ACTIVITIES OF CHARITABLE NATURE. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD CLAIMED DEPRECIATION ALLOWANCE OF RS.21,00,193/ - ON THE COST OF FIXED ASSETS, WHEREAS SUCH COST OF FIXED ASSETS HAS ALSO BEEN TAKEN AS AN APPLICATION OF INCOME WHI LE COMPUTING THE TOTAL INCOME. ACCORDING TO THE ASSESSING OFFICER, THIS AMOUNTED TO A DOUBLE DEDUCTION AND HE, THEREFORE, DISALLOWED THE ASSESSEES CLAIM FOR DEPRECIATION. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, 264 ITR 110 (BOM). 7. BEFORE US, THE ONLY PLEA OF THE DEPARTMENT IS THAT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECT ION (SUPRA) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT ON MERITS AND THAT ALLOWING OF DEPRECIATION WOULD AMOUNT TO A DOUBLE DEDUCTION, WHICH WAS IMPERMISSIBLE HAVING REGARD TO THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD., 199 ITR 43 ( SC). 8. WE FIND THAT THE DECISION IN THE CASE OF ESCORTS LTD. (SUPRA) BEING RELIED UPON BY THE REVENUE BEFORE US HAS BEEN CONSIDERED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF INDRAPRASTHA CANCER SOCIETY, (2014) 112 DTR 345 DATED 18.11.2014, WHEREIN I T HAS BEEN OPINED THAT THE ALLOWANCE OF DEPRECIATION IN SIMILAR SITUATION WOULD NOT AMOUNT TO A DOUBLE DEDUCTION. FURTHER, IT IS NOTICED THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF VISHWA JAGRITI MISSION, ITA NO. 140/2012 DATED 29.3.2012 ALSO ALLOWED A SIMILAR CLAIM AFTER ANALYSING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. (SUPRA), WHICH IS BEING RELIED UPON BY THE REVENUE. IT IS ALSO NOTABLE THAT THE HON'BLE SUPREME COURT HAS ALSO DISMISSED THE SLP FILED BY THE DEPARTMENT A GAINST THE SAID DECISION OF THE HON'BLE DELHI HIGH COURT VIDE SLP NO. 19321 OF 2013. WE FIND THAT THE HON'BLE BOMBAY HIGH COURT ITA 5578/MUM/2017 SUBSEQUENT TO THE DECISION IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) CONSIDERED A SIMILAR ARGUMENT OF THE REVENUE IN THE CASE OF M/S. MUMBAI EDUCATION TRUST, ITA NO. 11/2014 DATED 3.5.2016 AND ALLOWED THE CLAIM OF THE ASSESSEE. IN FACT, THE GROUNDS OF APPEAL URGED BY THE REVENUE BEFORE THE HON'BLE HIGH COURT IN THE CASE OF MUMBAI EDUCATION TRUST (SUPRA), WHICH READ AS UNDER : - (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW THE CLAIM OF DEPRECIATION RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) IGNORING THE RATIO OF HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF ESCORTS LTD. V/S. UNION OF INDIA (199 ITR 43) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION? B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW TO CARRY FORWARD OF DEFICIT OF EARLIER YEARS RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) WHILE THE REVENUE DID NOT FILE SLP AGAINST THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 2 64 ITR110 (BOM) DUE TO LOW TAX EFFECT?. STAND ON SAME FOOTING AS ARE BEING CANVASSED BEFORE US IN THE INSTANT CASE. THUS, THERE IS NO ERROR ON THE PART OF THE CIT(A) IN FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BA NKING PERSONNEL SELECTION (SUPRA) AND ALLOWING THE STAND OF THE ASSESSEE. THE OTHER ARGUMENT TAKEN BY THE REVENUE THAT ITS SLP FILED BEFORE THE HON'BLE SUPREME COURT IS PENDING ON A SIMILAR ISSUE IS OF NO CONSEQUENCE INASMUCH AS THE BINDING JUDGMENTS OF TH E HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AS WELL AS IN THE CASE OF M/S. MUMBAI EDUCATION TRUST (SUPRA) CONTINUE TO SUBSIST. THEREFORE, IN THIS BACKGROUND, WE FIND NO MERIT IN THE GROUND RAISED BY THE REVEN UE ON THE FIRST ISSUE AND THE SAME IS ACCORDINGLY DISMISSED. 9. SIMILARLY, THE SECOND ISSUE RAISED BY THE REVENUE IS WITH REGARD TO CARRY FORWARD OF THE DEFICIT OF RS.15,71,262/ - TO BE SET - OFF AGAINST THE FUTURE INCOME. ON THIS ASPECT ALSO, CIT(A) HAS ALLO WED THE CLAIM FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA); IN FACT, SIMILAR SITUATION HAS BEEN FURTHER AFFIRMED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF M/S. MUMBAI EDUCATIO N TRUST (SUPRA). THEREFORE, ON THIS ASPECT ALSO, WE FIND NO ERROR ON THE PART OF THE CIT(A) IN ALLOWING THE CLAIM OF THE ASSESSEE, WHICH WE HEREBY AFFIRM. 10. RESULTANTLY, APPEAL OF THE REVENUE IS DISMISSED, AS ANNOUNCED IN THE COURT IN THE PRESENCE OF BO TH THE PARTIES ON THE CONCLUSION OF HEARING ON 31ST OCTOBER, 2017. ITA 5578/MUM/2017 THUS , KEEPING IN VIEW AFORESAID DECISION OF HONBLE SUPREME COURT AND ALSO THE DECISION OF THE TRIBUNAL IN ASSESSES OWN CASE FOR AY 2011 - 12 , WE ARE OF THE VIEW THAT THE ASSESSEE TRUST IS ENTITLED FOR DEPRECIATION ON CAPITAL EXPENDITURE INCURRED FOR ACQUISITION OF CAPITAL ASSETS FOR OBJECTS OF THE ASSESSEE DESPITE THE FACT THE SAID CAPITAL EXPENDITURE WAS ALSO CLAIMED AS AN APPLICATION OF THE INCOME . SECONDLY , WE ALSO HOLD THAT ASSESSE ES WILL BE ENTITLE D FOR CARRY FORWARD OF EXCESS OF EXPENDITURE OVER INCOME WHICH SHALL BE ALLOWED TO BE SET OFF AGAINST INCOME OF THE SUBSEQUENT YEARS . THE REVENUE FAILS IN THIS APPEAL ON BOTH THE ISSUES RAISED BY IT AND THEIR APPEAL STAND DISMISSED. WE O RDER ACCORDINGLY. 6. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO.5578/MUM/2017 FOR AY 2012 - 13 STANDS DISMISSED. ORDER P RONOUNCED IN THE OPEN COURT ON 16 .01.2019. 16 .01.2019 SD/ - SD/ - (PAWAN SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 16 .01.2019 NISHANT VERMA SR. PRIVATE SECRETARY COPY TO 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// ITA 5578/MUM/2017 BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI