I.T.O. (EXEMPTION) WARD - 2(1), MUMBAI V. THE M. K. TATA TRUST, MUMBAI

ITA 6440/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3906 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 02-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RUCHITA JAIN
• Keywords: Capital asset; Depreciation; Charitable institution; Question of law; Capital expenditure
• Section: 12A; 10B; 32; 28; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI M. BALAGANESH , AM & SHRI AMARJIT SINGH , JM ITA NO. 6440 / MUM/20 1 7 ( ASSESSMENT YEAR : 2011 - 12 ) INCOME TAX OFFICER (EXEMPTION) ROOM NO.518, 5 TH FLOOR PIRAMALCHAMBERS, LALBAUG, LOWER P AREL, MUMBAI 400 012 VS. THE M.K. TATA TRUST EWART HOUSE, 3 RD FLOOR HOMI MODY STREET FORT, MUMBAI 400 001 PAN/GIR NO. AAATM0320R ( APPELLANT ) .. ( RESPONDENT ) REVENUE BY MS. RIDDHI MISHRA ASSESSEE BY SHRI RAJESH P SHAH & MS. RUCHITA JAIN DATE OF HEARING 24 / 01 /201 9 DATE OF PRONOUNCEMENT 31 / 01 /201 9 / O R D E R PER M. BALAGANESH (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF CIT(A) - 1, MUMBAI DATED 28/08/2017 FOR A.Y.2011 - 12 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961. 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN HOLDING THAT THE DIVIDEND INCOME WHICH IS EXEMPT U/S 10 OF THE ACT NEED NOT BE CONSIDERED FOR THE PURPOSE O F 85% APPLICATION OF INCOME SO AS TO CLAIM EXEMPTION U/S 11 OF THE ACT. THE SECOND ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN ALLOWING THE CLAIM OF DEPRECIATION ON ASSETS ALSO AS AN ITA NO. 6440/MUM/2017 M/S. M.K. TATA TRUST 2 APPLICATION OF INCOME, EVENTHOUGH THE ENTIRE COST OF FIXED ASSETS HAD ALREADY BEEN CLAIMED AS APPLICATION OF INCOME FOR THE PURPOSE OF RECKONING THE LIMITS OF 85% APPLICATION OF INCOME. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS A TRUST REGISTERED WITH DIT(E), MUMBAI U/S 12A OF THE ACT VIDE REGISTRATION NO. TR/5060 DATED 15.1.1976 AND ALSO WITH CHARITY COMMISSIONER, MUMBAI VIDE REGISTRATION NO. E - 1631 (BOM.). THE ASSESSEE TRUST FILED ITS RETURN OF INCOME FOR THE ASST YEAR 2011 - 12 ON 11.7.2011 ALONG WITH INCOME AND EXPEND ITURE ACCOUNT, BALANCE SHEET AND AUDIT REPORT IN FORM 10B DECLARING EXCESS OF EXPENDITURE OVER INCOME OF RS 23,18,683/ - . THE LD AO OBSERVED THAT THE ASSESSEE HAD DERIVED DIVIDEND INCOME OF RS 1,69,47,000/ - AND CLAIMED THE SAME AS EXEMPT AND HAD NOT BEEN C ONSIDERED FOR THE PURPOSE OF RECKONING THE LIMIT OF 85% APPLICATION OF INCOME FOR CLAIMING EXEMPTION U/S 11 OF THE ACT. HE OBSERVED THAT THE SECTION WHICH DEALS WITH INCOME DERIVED FROM PROPERTY HELD UNDER TRUST IS SECTION 11 OF THE ACT AND NOT SECTION 10 OF THE ACT. ACCORDINGLY HE OBSERVED THAT THE ASSESSEE TRUST CANNOT CLAIM EXEMPTION U/S 10(34) /10(35) / 10(38) OF THE ACT BECAUSE SECTION 10 DOES NOT DEAL WITH INCOME DERIVED FROM PROPERTY HELD UNDER TRUST. THE LD AO ACCORDINGLY HELD THAT THE DIVIDEND INCOME OF RS 1,69,47,000/ - ALSO HAD TO BE CONSIDERED AS REVENUE INCOME ELIGIBLE FOR APPLICATION OF INCOME SO AS TO CLAIM EXEMPTION U/S 11 OF THE ACT AND IF THERE IS ANY SHORTAGE IN THE SAME, THE SAME NEED TO BE BROUGHT TO TAX. 3.1. THE LD AO ALSO HELD THAT SINCE THE ASSESSEE TRUST IS ELIGIBLE FOR CLAIMING THE ENTIRE COST OF FIXED ASSETS AS AN APPLICATION OF INCOME SO AS TO CLAIM EXEMPTION U/S 11 OF THE ACT, THE DEPRECIATION CLAIMED THEREON IN THE SUM OF RS 3,27,323/ - CANNOT BE ALLOWED AS APPLICATION OF INCOME, AS ITA NO. 6440/MUM/2017 M/S. M.K. TATA TRUST 3 ACCORDING TO LD AO, THE SAME WOULD TANTAMOUNT TO DOUBLE DEDUCTION BEING GRANTED TO THE ASSESSEE. 3.2. BASED ON AFORESAID ADJUSTMENTS, THE LD AO REWORKED THE COMPUTATION OF INCOME AND DETERMINED THE INCOME OF THE ASSESSEE TRUST AT RS 1,13,47, 030/ - FOR THE ASST YEAR 2011 - 12 AND COMPLETED THE ASSESSMENT. 4. THE LD CITA BY PLACING RELIANCE ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT(E) VS JASUBHAI FOUNDATION REPORTED IN 374 ITR 215 (BOM) GRANTED RELIEF TO THE ASSESSE E BY OBSERVING THAT THE DIVIDEND INCOME OF RS 1,69,47,000/ - WHICH IS EXEMPT U/S 10 OF THE ACT NEED NOT BE CONSIDERED FOR RECKONING THE LIMITS OF 85% APPLICATION OF INCOME. WITH REGARD TO ALLOWABILITY OF DEPRECIATION ON ASSETS AS AN APPLICATION OF INCOME, THE LD CITA BY PLACING RELIANCE ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS INSTITUTE OF BANKING PERSONNEL REPORTED IN 264 ITR 110 (BOM) GRANTED RELIEF TO THE ASSESSEE BY HOLDING THAT THE ALLOWABILITY OF DEPRECIATION AS AN A PPLICATION OF INCOME WOULD NOT TANTAMOUNT TO DOUBLE DEDUCTION. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE GROUND NO. 1 RAISED BY THE REVENUE WITH REGARD TO INCLUSION OF DIVIDEND INCOME (E XEMPT) OF RS 1,69,47,000/ - FOR THE PURPOSE OF RECKONING THE 85% APPLICATION OF INCOME IS ALREADY SETTLED IN FAVOUR OF THE ASSESSEE BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT(E) VS JASUBHAI FOUNDATION REPORTED IN 374 ITR 215 (BOM) WHEREIN I T WAS HELD AS UNDER: - 8. UPON A PERUSAL OF THE ORDER OF THE ASSESSING OFFICER AND THAT OF THE COMMISSIONER UPHOLDING IT, WE ARE OF THE VIEW THAT THE TRIBUNAL WAS CORRECT IN SETTING ASIDE THESE CONCURRENT ORDERS. THE LANGUAGE OF THE TWO ITA NO. 6440/MUM/2017 M/S. M.K. TATA TRUST 4 SECTIONS IS PLAIN A ND CLEAR. THE PROVISIONS, NAMELY, SECTIONS 10 AND 11 FALL UNDER A CHAPTER WHICH IS TITLED 'INCOMES WHICH DO NOT FORM PART OF TOTAL EXPENDITURE' (CHA PTER III). SECTION 10 DEALS WITH INCOMES NOT INCLUDED IN TOTAL INCOME WHEREAS SECTION 11 DEALS WITH INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIG IOUS PURPOSES. WE HAVE NOT FOUND ANYTHING IN THE LANGUAGE OF THE TWO PROVISIONS NOR WAS MR. MALHOTRA ABLE TO POINT OUT AS TO HOW WHEN CERTAIN INCOME IS NOT TO BE INCLUDED IN COMPUTING TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON, THEN, THAT WHICH IS EXCLU DED FROM SECTION 10 COULD BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON / ASSESSEE. THAT MAY BE A PERSON WHO RECEIVES OR DERIVES INCOME FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHA RITABLE OR RELIGIOUS PURPOSES. THUS, THE INCOME WHICH IS NOT TO BE INCLUDED IN COMPUTATION OF THE TOTAL INCOME IS A MATTER DEALT WITH BY SECTION 10 AND BY SECTION 11 THE CASE OF AN ASSESSEE WHO HAS RECEIVED INCOME DERIVED FROM PROPERTY HELD UNDER TRUST ONLY FOR CHARITABLE OR RELIGIOUS PURPOSES TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PROPERTY IN INDIA AND THAT ANY SUCH INCOME IS ACCUMULAT ED OR SET APART FOR APPLICATION FOR SUCH PURPOSES IN INDIA TO THE EXTENT OF WHICH THE INCOME SO ACCUMULATED OR SET APART IN COMPUTING 15% OF THE INCOME OF SUCH PROPERTY, IS DEALT WITH. THEREFORE, IT IS A PARTICULAR ASSESSEE AND WHO IS IN RECEIPT OF SUCH IN COME AS IS FALLING UNDER CLAUSE (A) OF SUB - SECTION (1) OF SECTION 11 WHO WOULD BE CLAIMING THE EXEMPTION OR BENEFIT. THAT IS A INCOME DERIVED BY A PERSON FROM PROPERTY. IT IS THAT WHICH IS DEALT WITH AN D IF THE PROPERTY IS HELD IN TRUST FOR THE SPECIFIED PURPOSE, THE INCOME DERIVED THEREFROM IS EXEMPT AND TO THE EXTENT INDICATED IN SECTION 11(1)(A) OF THE INCOME TAX ACT, 1961. THERE IS NOTHING IN THE L ANGUAGE OF SECTIONS 10 OR 11 WHICH SAYS THAT WHAT IS PROVIDED BY SECTION 10 OR DEALT WITH IS NOT TO BE TAKEN INTO CONSIDERATION OR OMITTED FROM THE PURVIEW OF SECTION 11 . IF WE ACCEPT THE ARGUMENT OF MR. MALHOTRA AND THE REVENUE, THE SAME WOULD AMOUNT TO READING INTO THE PROVISIONS SOMETHING WHICH IS EXPRESSLY NOT THERE. IN SUCH CIRCUMSTANCES, THE TRIBUNAL WAS RIGHT IN ITS CONCLUSION THAT THE INCOME WHICH IN THIS CASE SRP 11/13ITXA1310.13.DOC THE ASSESSEE TRUST HAS NOT INCLUDED BY VIRTUE OF SECTION 10 , THEN, THAT CANNOT BE CONSIDERED UNDER SECTION 11 . 9. IN THE CIRCUMSTANCES AND WHEN THE INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSE IS NOT A MATTER COVERED OR DEALT WITH BY SEC TION 10 THAT THE TRIBUNAL'S VIEW CANNOT BE TERMED AS PERVERSE OR VITIATED BY ANY ERROR OR LAW APPARENT ON THE FACE OF THE RECORD. THE CLEAR LANGUAGE OF THESE PROVISIONS ENABLES US TO UPHOLD THE ORDER OF THE TRIBUNAL. IT IS, ACCORDINGLY, UPHELD. THE REVENU E'S APPEAL DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. ITA NO. 6440/MUM/2017 M/S. M.K. TATA TRUST 5 RESPECTFULLY FOLLOWING THE AFORESAID DECISION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CITA GRANTING RELIEF TO THE ASSESSEE IN THIS REGARD. ACCORDINGLY, THE GROUND NO. 1 RAISED BY THE REVENUE IS DISMISSED. 6.1. WITH REGARD TO ALLOWABILITY OF DEPRECIATION ON ASSETS AS AN APPLICATION OF INCOME, WE FIND THAT THE ISSUE IS NOW SETTLED BY THE RECENT DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS RAJASTHAN AND GUJARATI CHARITAB LE FOUNDATION REPORTED IN 402 ITR 441(SC) WHEREIN IT WAS HELD 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 TH E 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 WITH 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 PURUPOSES UNDER SECTION 11(1)(A) OF THE ACT. THE VIEW TAKEN BY THE ASSESSING OFF ICER 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 OFF OF THE COST O F 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 COURTS HAVE ACCEPT ED 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 'COMMISSIONER OF INCOM E TAX V. INSTITUTE OF BANKING PERSONNEL SELECTION (IBPS)' [(2003) 131 TAXMAN 386 (BOMBAY)]. 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 QUESTIO N 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 REPO RTER, 1084 THE FACTS WERE AS FOLLOWS. THE ASSESSEE WAS A CHARITABLE TRUST. IT WAS REGISTERED AS A PUBLIC CHARITABLE TRUST. IT WAS ALSO ITA NO. 6440/MUM/2017 M/S. M.K. TATA TRUST 6 REGISTERED WITH THE COMMISSIONER OF INCOME TAX, PUNE. THE ASSESSEE DERIVED INCOME FROM THE TEMPLE PROPERTY WHICH WAS A TR UST PROPERTY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEARS 1977 - 78, 1978 - 79 AND 1979 - 80, THE ASSESSEE CLAIMED DEPRECIATION ON THE 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 SECTIO N 11 OF THE INCOME 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 IN COME 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 PROVIDE S 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 B EHALF 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 COURT REJECTED THIS ARGUMENT. IT WAS HELD THAT NORMAL DEPRECIATION CAN BE CONSIDERED AS A LEGITIMA TE 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 32OF THE INCOME TAX ACT WAS THE ONLY SECTION GRANTING BENE FIT OF DEDUCTION ON ACCOUNT OF DEPRECIATION. IT WAS HELD THAT INCOME OF A CHARITABLE TRUST DERIVED FORM 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 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 PROVIDING 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 DEPARTMENT. 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 (EXEM PTION) 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 DEPRECIABLE ASSETS. THE ASSESSEE TOOK INTO ACCOUNT DEPRECIATION ON THOSE ASSETS IN COMPUTING THE INCOME OF THE TRUST. THE ITA NO. 6440/MUM/2017 M/S. M.K. TATA TRUST 7 ITO HELD THAT DEPRECIATION COULD NOT BE TAKEN INTO ACCOUNT BECAUSE, FULL CAPITAL EXPENDITURE 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 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 'APPLI CATION 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 F AVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. AFTER HEARING LEARNED COUNSEL FOR THE PARTIES, WE ARE OF 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 T HE SAME. 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 TAKEN A CONTRARY VIEW IN 'LISSIE MEDICAL INSTITUTIONS V. COMMISSIONER OF INCOME TAX'. 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 AF ORESAID REASONS, WE AFFIRM THE VIEW TAKEN BY THE HIGH COURTS IN THESE CASES AND DISMISS TH ESE MATTERS. RESPECTFULLY FOLLOWING THE AFORESAID DECISION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CITA GRANTING RELIEF TO THE ASSESSEE IN THIS REGARD . ACCORDINGLY, THE GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED. ITA NO. 6440/MUM/2017 M/S. M.K. TATA TRUST 8 7. THE GROUND NOS. 3 & 4 RAISED BY THE REVENUE ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER P RONOUNCED IN THE OPEN COURT ON THIS 31 / 01 /201 9 SD/ - ( AMARJIT SINGH ) SD/ - ( M. BALAGANESH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 31 / 01 /201 9 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//