The DCIT (Exemptions), Circle-2, Ahmedabad V. Ankleshwar Industrial Development Society, Bharuch

ITA 733/AHD/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2134 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 24-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SRINIVAS T BIDARI
• Assessee Lawyers: MRS ARTI N SHAH
• Keywords: Capital asset; Depreciation; Charitable institution; Capital receipt; Capital expenditure
• Section: 12A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL,SURAT BENCH,SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.733/AHD/2017/SRT [ [ / ASSESSMENT YEAR: 2012-13 DY. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CIRCLE-2, AHMEDABAD. VS. M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY, SMT. JAYABEN MODY HOSPITAL, VALIA ROAD, GIDC, ANKLESHWAR DIST., BHARUCH 393 002. [PAN: AAATA 4648Q] ( / APPELLANT) ( /RESPONDENT) . / ITA NO.854/AHD/2017/SRT [ [ / ASSESSMENT YEAR: 2012-13 M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY, SMT. JAYABEN MODY HOSPITAL, VALIA ROAD, GIDC, ANKLESHWAR DIST., BHARUCH 393 002. [PAN: AAATA 4648Q] VS. DY. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CIRCLE-2, AHMEDABAD. ( / APPELLANT) ( /RESPONDENT) / ASSESSEE BY : MRS. ARTI N. SHAH, C.A /REVENUE BY : SHRI SRINIVAS T. BIDARI, SR. DR /DATE OF HEARING : 11-07-2018 / DATE OF PRONOUNCEMENT : 30-07-2018 2 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY / ORDER PERC.M.GARG, JUDICIAL MEMBER : THESE CROSS APPEALSHAVE BEEN FILED BY THE REVENUE AND THE ASSESSEE DIRECTED AGAINST THECOMMON ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD (CIT(A) FOR SHORT) DATED 04.01.2017 FOR THE ASSESSMENT YEAR (A.Y) 2012-13. 2. THE GROUNDS RAISED BY THE REVENUE IN ITA NO.733/AHD/2017/SRTREAD AS FOLLOWS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE IS THE LD. CIT(A) JUSTIFIED IN ALLOWING THE DEPRECIATION OF RS. 91,11,766/- WHILE ENTIRE COST OF FIXED ASSETS HAS BEEN ALLOWED TOWARDS APPLICATION OF INCOME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.854/AHD/2017/SRT READ AS FOLLOWS: 1. THE LEARNED C.I.T.(APPEALS)-9, AHMEDABAD HAS ERRED IN LAW AND ON THE FACTS OF THE CASE INCONFIRMING THE REJECTION BY THE LEARNED ASSESSING OFFICER OF CLAIM MADE BY THE APPELLANT THAT DONATIONS OF RS.75,51,250/- HAVE BEEN RECEIVED FOR SPECIFIC PURPOSE/ACTIVITIES, AND THEREFORE, COVERED U/S.11(1)(D) OF THE I.T.ACT,1961 AND HENCE CANNOT BE INCLUDED IN THE INCOME OF THE APPELLANT. 2. THE APPELLANT THEREFORE, PRAYS THAT DONATIONS OF RS.75,51,250/- BE HELD NOT INCLUDIBLE IN THE INCOME OF THE APPELLANT AS BEING RECEIVEDFORSPECIFIC PURPOSE/ACTIVITIES AS FORMING PART OF THE CORPUSAND THEREFORE COVERED BY PROVISIONS OF SECTION 11(1)(D) OF THE I.T.ACT,1961. ASSESSEES APPEAL IN ITA NO. 854/AHD/2017/SRT : 4. APROPOS THE GROUNDS OF ASSESSEE, WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE 3 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY RECORD OF THE TRIBUNAL. THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS ERRED IN CONFIRMING THE REJECTION OF CLAIM OF ASSESSEE BY THE ASSESSING OFFICER (AO) THAT DONATIONS OF RS. 75,51,250/- HAVE BEEN RECEIVED FOR SPECIFIC PURPOSE/ACTIVITIES AND THEREFORE, COVERED U/S. 11(1)(D) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AND HENCE, THE SAME CANNOT BE INCLUDED IN THE INCOME OF THE APPELLANT. THE LD. AR VEHEMENTLY POINTED OUT THAT THE SAID DONATIONS WAS NOT INCLUDED TA BILL IN THE INCOME OF APPELLANT AS BEING RECEIVED FOR A SPECIFIC PURPOSE/ACTIVITIES AND FORMING PART OF CORPUS FUND THEREFORE, THE SAME WAS COVERED BY PROVISION OF S. 11(1)(D) OF THE ACT. PLACING RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT DATED 02.01.2012 IN SLP (CIVIL) NO.20789/2011 IN THE CASE OF CIT VS. GUJARAT SAFAI KAMDAR VIKAS NIGAM AND SUBMITTED THAT THE HON'BLE APEX COURT AS DISMISSED SLP OF THE DEPARTMENT UPHOLDING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT OF GUJARAT DATED 02.05.2011 IN TAX APPEAL NO.1934/2009, WHEREIN IT WAS HELD THAT THE FUNDS WERE MADE AVAILABLE TO THE CORPORATION FOR IMPLEMENTATION OF THE SCHEME IN A PARTICULAR MANNER AND HENCE, THE TRIBUNAL COMMITTED NO ERROR IN HOLDING THAT THE GRANT IN QUESTION FULFILLS THE REQUIREMENT OF S. 11(1)(D) OF THE ACT R/W. S. 12(1) OF THE ACT. 5. THE LD. AR HAS ALSO PLACED RELIANCE ON THE DECISION OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. STHANAKVASI VARDHAMAN VANIK 4 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY JAIN SANGH 131 TAXMANN 270 (GUJ.) , WHEREIN IT WAS HELD THAT THE CONTRIBUTION RECEIVED BY THE ASSESSEE TRUST TOWARDS CONSTRUCTION OF WADI FOR THE CASTE PEOPLE WOULD FARM PART OF CORPUS OF TRUST AND THEREFORE, COULD NOT BE TREATED AS INCOME OF THE ASSESSE TRUST. THE LD. AR HAS ALSOPLACED RELIANCE ON THE DECISION OF ITAAT, PUNE IN THE CASE OF ITO VS. SERUM INSTITUTE OF INDIA RESEARCH FOUNDATION 90 TAXMANN.COM 229 (PUNE-TRIB.) , AND SUBMITTED THAT CORPUS SPECIFIC VOLUNTARY CONTRIBUTIONS BEING IN NATURE OF CAPITAL RECEIPT ARE OUTSIDE SCOPE OF INCOME S. 2(24)(IIA) OF THE ACT AND THUS, THE SAME CANNOT BE BROUGHT TO TAX EVEN IN THE CASE OF TRUST NOT REGISTERED U/S. 12A OF THE ACT. 6. THE LD. AR DREW OUT ATTENTION TOWARDS ASSESSEES PAPER BOOK PG. 36 AND SUBMITTED THAT THE GOVT. OF INDIA, MINISTRY OF FINANCE VIDE ORDER DATED 18.05.2009 ISSUED A NOTIFICATION STATING THAT THE CENTRAL GOVT. HAD NOTIFIED THE APPELLANT SOCIETY INITIALLY FOR A PERIOD OF THREE YEARS BEGINNING WITH AY 1994-95 FOR DEVELOPMENT AND EXTENSION OF EDUCATION, MEDICAL AND SPORTS FACILITIES TO RURAL AREAS THROUGH EDUCATION VAN, HOSPITAL BUILDING WITH EQUIPMENT, MOBILE MEDICAL UNIT AND PREVENTION AND CURE OCCUPATIONAL DECEASES AND GROUND TRACKS AND AUDITORIUM/STADIUM IN THE 50 VILLAGES AROUND ANKLESHWAR CITY. HE FURTHER SUBMITTED THAT THE LAST PART OF SAID NOTIFICATION DATED 18.05.2009 CLEARLY STATES THAT THE APPELLANT IS NOTIFIED UP TO FINANCIAL YEAR 2011-12 PERTAINING TO AY 2012-13 WHICH ALSO 5 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY IS THE PERIOD UNDER CONSIDERATION AND THUS THE APPELLANT IS NOTIFIED BY THE CENTRAL GOVT. EXERCISING THE POWERS CONFERRED BY SUB S. (1) R/W CLAUSE (B) OF EXPLANATION TO S. 35AC OF THE ACT WHICH NOTIFIES THE ASSESSE/APPELLANT FOR THE SAID PURPOSES. THE LD. AR FINALLY SUBMITTED THAT THE LD. CIT(A) WAS NOT CORRECT IN UPHOLDING THE FINDINGS OF THE AO IN VIEW OF THE ABOVE NOTED FACTS AND CIRCUMSTANCES AND RATIO OF THE DECISIONS OF HONBLE SUPREME COURT AND HON'BLE HIGH COURT THEREFORE, THE ORDERS OF THE AUTHORITIES BELOW MAY KINGLY BE SET ASIDE BY ALLOWING THE CLAIM OF THE ASSESSEE. 7. REPLYING TO THE ABOVE, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ASSESSMENT YEAR AS WELL AS THE FIRST APPELLATE ORDER AND SUBMITTED THAT THERE WAS NO CLEAR DIRECTION FROM THE DONOR THAT IT SHALL FORM PART OF CORPUS OR AND IN ABSENCE OF SUCH DIRECTIONS THE SAME MAY NOT BE TREATED AS EXEMPT U/S. 11(1)(D) OF THE ACT. HENCE, THE AO WAS RIGHT IN TREATING THE ENTIRE RECEIPT AS INCOME OF THE ASSESSEE-TRUST FOR THE RELEVANT PERIOD AND THE LD. CIT(A) WAS RIGHT IN CONFIRMING THE SAME. 8. PLACING REJOINDER TO THE ABOVE SUBMISSIONS, THE LD. DR SUBMITTED THAT THE ASSESSEE SUBMITTED THAT ALL RELEVANT DOCUMENTS SHOWING THAT THE DONORS HAVE GIVEN DONATION TO THE APPELLANT-SOCIETY WITH A SPECIFIC DIRECTION AND THE APPELLANT-SOCIETY ALSO ISSUED RECEIPTS OF SAID DONATIONS, WHEREIN IT WAS CLEARLY SAID THAT THE DONATIONS IS BEING RECEIVED FOR DEVELOPMENT AND EXTENSION OF MOBILE EDUCATION VAN APPROVED BY THE 6 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY NATIONAL COMMITTEE U/S. 35AC OF THE ACT. HE DREW OUR ATTENTION TOWARDS PGS. 65, 70 & 79 OF THE ASSESSEES PAPER BOOK AS A SAMPLE CASE AND SUBMITTED THAT THE DONATION RECEIVED FROM LUPIM LTD. FOR THE SAID PURPOSE OF DEVELOPMENT AND EXTENSION OF MOBILE VAN PROJECT APPROVED BY NATIONAL COMMITTEE U/S. 35AC OF THE ACT THEREFORE, NO OTHER VIEW CAN BE TAKEN. THE LD. AR ALSO INVITE OUT ATTENTION TOWARDS PGS. 91, 93 & 107 OF THE ASSESSEES PAPER BOOK AND SUBMITTED THAT SIMILARLY THE DONATIONS RECEIVED BY MIRAJ IMAGING CENTRE PVT. LTD. WAS FOR THE PURPOSE OF DEVELOPMENT AND EXTENSION OF PROJECT U/S. 80G(5) OF THE ACT FOR A SPECIFIC PURPOSE THUS, THE SAME WAS FORMING PART OF CORPUS FUND AND THEREFORE, COVERED BY THE PROVISION OF S. 11(1)(D) OF THE ACT. 9. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS, FIRST OF ALL, WE MAY POINT OF OUT THAT THERE IS NO DISPUTE REGARDING QUANTUM OF DONATIONS OF RS. 75,51,250/- BY THE ASSESSEE. THE MAIN CONTROVERSY PERTAINING TO SAID DONATIONS IS THAT THE STAND OF THE ASSESSEE IS THAT THE DONATIONS HAD BEEN RECEIVED FOR A SPECIFIC PURPOSE/ACTIVITY AS CORPUS FUND AND THEREFORE, COVERED AND EXEMPTED UNDER PROVISION OF S. 11(1)(D) OF THE ACT, WHEREAS THE ALLEGATION OF AO AS WELL AS LD. CIT(A) IS THAT THERE MUST BE CLEAR DIRECTION FROM THE DONOR THAT THE DONATIONS WERE FORMING PART OF CORPUS AND IN ABSENCE OF SUCH DIRECTION THE SAME MAY NOT BE TREATED AS EXEMPT U/S. 11(1)(D) OF THE ACT. 7 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY 10. ON RESPECTFUL AND VIGILANT PERUSAL OF THE RATION ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT SAFAI KAMDAR VIKAS NIGAM AND CIT VS. STHANAKVASI VARDHAMAN VANIK JAIN SANGH (SUPRA), WHICH HAS BEEN UPHELD BY THE SUPREME COURT, IT WAS HELD THAT THOUGH EXACT WORDS MAY NOT HAVE BEEN USED THAT THE FUNDS MADE AVAILABLE ARE DIRECTED TO FORM THE CORPUS OF THE CORPORATION AND TO BE USED FOR SUCH PURPOSE, THE ENTIRE PURPORT OF THE SCHEME HAS TO BE COVERED FROM THE READING OF THE SCHEME AS A WHOLE. IT WAS ALSO HELD THAT ON BARE READING OF THE SCHEME IT LEAVES NO DOUBT THAT THE FUNDS WERE MADE AVAILABLE OF THE CORPORATION FOR IMPLEMENTATION OF THE SCHEME IN A PARTICULAR MANNER THEREFORE, THE GRANT IN QUESTION FULFILLS THE REQUIREMENT OF S. 11(1)(D) OF THE ACT. 11. WE HAVE NOTED ABOVE, THE DONATIONS RECEIVED FROM LUPIM LTD., IT IS DISCERNABLE THAT IN THE RECEIPT ISSUED BY THE APPELLANT COMPANY (PAPER BOOK PG. 79) IT IS CLEAR THAT THE DONATION HAS BEEN RECEIVED BY THE ASSESSEE COMPANY FOR DEVELOPMENT AND EXTENSION OF MOBILE VAN PROJECT APPROVED BY NATIONAL COMMITTEE U/S. 35AC OF THE ACT. FURTHER, FROM THE COPY OF THE RECEIPT ISSUED TO MIRAJ IMAGING CENTRE PVT. LTD. DATED 11.05.2011 (ASSESSEE PAPER BOOK PG. 109) IT IS ALSO CLEAR THAT THE APPELLANT SOCIETY RECEIVED CORPUS FUND FOR DEVELOPMENT AND EXTENSION OF 8 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY PROJECT AND THE SAME WAS DECLARED AS ELIGIBLE FOR TAX EXEMPT U/S. 80G(5) OF THE ACT. 12. THESE TWO SAMPLE CASES LEAVE NO DOUBT IN OUR MIND THAT THE IMPUGNED DONATIONS WERE RECEIVED BY THE APPELLANT SOCIETY FOR A SPECIFIC PURPOSES/ACTIVITIES AND THE PROJECT WAS APPROVED BY THE NATIONAL COMMITTEE OF CENTRAL GOVT. U/S. 35AC OF THE ACT. WE, THEREFORE, ARE OF THE OPINION THAT IMPUGNED DONATIONS, RECEIVED BY THE APPELLANT DURING THE RELEVANT PERIOD, HAVE BEEN RECEIVED FOR A SPECIFIC PURPOSES/ACTIVITIES AND THE SAME IS FORMING PART OF CORPUS FUND THEREFORE, COVERED BY PROVISION OF S. 11(1)(D) OF THE ACT AND HENCE, THE SAME IS EXEMPT AND CANNOT TREATED AS INCOME OF THE ASSESSEE FOR THE RELEVANT PERIOD. OUR CONCLUSION ALSO GETS STRONG SUPPORT FROM THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASES OF CIT VS. STHANAKVASI VARDHAMAN VANIK JAIN SANGH AND CIT VS. GUJARAT SAFAI KAMDAR VIKAS NIGAM (SUPRA). FINALLY, WE HOLD THAT THE AO WAS NOT CORRECT AND JUSTIFY IN DISMISSING THE CLAIM OF THE ASSESSEE AND LD. CIT(A) WAS NOT ALSO JUSTIFIED AND CORRECT IN UPHOLDING THE SAME AND HENCE, GROUND NO.1 & 2 OF THE ASSESSEE ARE ALLOWED AND THE AO DIRECTED TO DELETE THE ADDITION AS THE IMPUGNED DONATIONS ARE NOT INCLUDABLE IN THE INCOME OF THE ASSESSEE AS BEING RECEIVED FOR A SPECIFIC PURPOSE/ACTIVITY FORMING PART OF CORPUS AND THEREFORE, COVERED BY THE PROVISION OF S. 11(1)(D) OF THE ACT. 9 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY REVENUE APPEAL IN ITA NO.733/AHD/2017/SRT : 13. APROPOS GROUNDS OF REVENUE, WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBUNAL, INTER ALIA, RELAVANT PART OF ASSESSMENT YEAR AS WELL AS FIRST APPELLATE ORDER. THE LD. DR SUPPORTING THE ASSESSMENT YEAR AND SUBMITTED THAT IN THE PREVIOUS ASSESSMENT ORDER FOR AY 2011-12, THE AO HAS DISALLOWED THE CLAIM OF DEPRECIATION AND ADDED THE CAPITAL EXPENDITURE FOR APPLICATION, THEREFORE, THE DEPRECIATION WAS RIGHTLY DISALLOWED AND CAPITAL EXPENDITURE WAS ACCEPTED AS APPLICATION FOR THE PURPOSE OF THE TRUST. THE LD. DR SUBMITTED THAT THE CLAIM OF THE ASSESSEE FOR DEPRECIATION WAS NOT ALLOWABLE AS PER PROVISIONS BUT THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE WITHOUT ANY GOOD CAUSE AND LEGAL PROVISION THEREFORE, THE IMPUGNED FIRST APPELLATE ORDER MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE AO. 14. REPLYING TO THE ABOVE, THE LD. AR TOOK US THROUGH THE RELEVANT PARAS OF 7.2, 7.3 & 7.4 OF THE FIRST APPELLATE ORDER AND SUBMITTED THAT THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SHETH MANILAL REANCHHODDAS VISHRAM BHAVAN TRUST REPORTED IN 198 ITR 598 (GUJ-HC) WHILE DELETING THE DISALLOWANCE OF DEPRECIATION THEREFORE, THE IMPUGNED ORDER MAY KINDLY BE UPHELD. 10 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY 15. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. RAJASTHAN & GUJARATI CHARITABLE FOUNDATION POONA REPORTED IN 89 TAXMANN.COM 127 (SC) HELD THAT EVEN THOUGH THE EXPENDITURE INCURRED FOR ACQUISITION OF CAPITAL ASSETS WAS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSE U/S. 11(1)(D) OF THE ACT, YET DEPRECIATION COULD BE ALLOWED ON THE ASSETS SO PURCHASED PRIOR TO 01.04.2015. THE LD. AR HAS ALSO PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION 264 ITR 110(BOM) AND SUBMITTED THAT THE CAPITAL EXPENDITURE ON ACQUISITION OF ASSETS HAS BEEN ALLOWED AS DEDUCTION WHILE COMPUTATION OF INCOME OF THE TRUST THEN ALSO DEPRECATION OF SUCH ASSETS IS ALLOWABLE. 16. IN THE PRESENT CASE ALSO, THE CLAIM OF THE DEPRECIATION OF THE ASSESSEE ON CAPITAL ASSET WAS DISALLOWED BY THE AO ON THE GROUND THAT THE DEPRECIATION HAS TO BE DISALLOWED ON THE CAPITAL EXPENDITURE TREATED AS APPLICATION FOR THE PURPOSE OF TRUST. THE LD. CIT(A) DELETED THE DISALLOWANCE AND ADDITION OF DEPRECIATION BY FOLLOWING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST (SUPRA), WHEREIN IT WAS HELD THAT HAVING REGARD TO THE SCHEME OF THE ACT, INCOME REFERRED TO IN S. 11(1)(A) OF THE ACT WAS NOT TO BE COMPUTED NOT IN ACCORDANCE WITH THE TRANSACTION 11 ITA NOS.733 & 854/AHD/2017/SRT (A.Y: 2012-13) M/S. ANKLESHWAR INDUSTRIAL DEVELOPMENT SOCIETY BUT IN ACCORDANCE WITH THE NORMAL RULES OF ACCOUNTANCY UNDER WHICH DEPRECIATION HAS TO BE ALLOWED WHILE COMPUTING SUCH INCOME U/S. 11(1)(A) OF THE ACT. CONSEQUENTLY, WE ARE INCLINED TO HOLD THAT THE LD. CIT(A) WAS RIGHT IN ALLOWING CLAIM OF THE DEPRECIATION OF THE ASSESSEE ON THE CAPITAL ASSET ON WHICH APPLICATION OF INCOME WAS ALLOWED. WE ARE UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH THE CONCLUSION DRAWN BY THE LD. CIT(A). ACCORDINGLY, GROUNDS OF REVENUE BEING DEVOID OF MERITS ARE DISMISSED. 17. IN THE RESULT,APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 30 TH JULY, 2018. / SURAT ; DATED :30 TH JULY, 2018 EDN / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. ( ) / THE CIT(A)-9, AHMEDABAD; 4. PRL. CIT, SURAT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . / BY ORDER , // TRUE COPY// / ASSISTANT REGISTRAR , / ITAT, SURAT SD/ - SD/ - ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) / JUDICIAL MEMBER