The order of the Bench was delivered by
1. Abraham P. George (Accountant Member).-In this appeal filed by the Revenue, it is aggrieved that the Commissioner of Income-tax (Appeals), Mysuru, vide his order dated November 13, 2014, allowed the claim of depreciation on the assets, cost of which was allowed as a part of utilisation.
2. The assessee, a trust registered under section 12A of the Income-tax Act, 1961 (in short "the Act"), had claimed depreciation on assets as an outgo while computing its income, which claim was disallowed by the Assessing Officer relying on the decision of the hon'ble apex court in the case of Escorts Ltd. v. Union of India [1993] 199 ITR 43 (SC).
3. In its appeal before the Commissioner of Income-tax (Appeals), the assessee relied on the decision of co-ordinate Bench of this Tribunal in the case of Asst. CIT v. Shri Adichunchanagiri Shikshana Trust [2012] 19 ITR (Trib) 828 (Bang). The Commissioner of Income-tax (Appeals) accepted the contention of the assessee by relying on the decisions of the Tribunal in the abovementioned case as well as in the case of Dr. T. M. A. Pai Foundation (I. T. A. Nos. 486 to 491/Bang/2009, dated February 16, 2010) which went in favour of the assessee. As per the Commissioner of Income-tax (Appeals), this Tribunal had distinguished the decision of the hon'ble Kerala High Court in the case of Lissie Medical Institutions v. CIT [2012] 348 ITR 344 (Ker), in the latter decision. He allowed the claim of the assessee.
4. Now before us, the learned Departmental representative submitted that in view of the judgment of the hon'ble Kerala High Court in the case of Lissie Medical Institutions v. CIT [2012] 348 ITR 344 (Ker), the claim of depreciation on assets cost of which was allowed as an outgo while working out the utilisation could not be allowed.
5. Nobody appeared on behalf of the assessee.
6. We have perused the orders and heard the contentions of the learned Departmental representative. The issue whether depreciation should be allowed on assets cost of which was allowed as a part of utilisation while computing the income of an assessee registered under section 12A of the Act, had come up before this Tribunal in the case of Asst. CIT v. Medical Relief Society of South Canara I. T. A. No. 1713/Bang/2013, dated December 10, 2014 [2015] 5 ITR (Trib)-OL 74 (Bang). This Tribunal, inter alia, relying on the decision of this Tribunal in the case of Dr. T. M. A. Pai Foundation and Asst. CIT v. Shri Adichunchanagiri Shikshana Trust [2012] 19 ITR (Trib) 828 (Bang), and distinguishing the decision of the hon'ble Kerala High Court in the case of Lissie Medical Institutions v. CIT [2012] 348 ITR 344 (Ker) had held as under (page 77 of 5 ITR (Trib)) :
"Ground No. 1 : The learned Commissioner of Income-tax (Appeals) erred in law by allowing the claim of depreciation on capital assets purchased during the year which have been considered as application of income.
Ground No. 2 : The learned Commissioner of Income-tax (Appeals) erred by allowing the claim of depreciation on capital assets acquired during the year as it tantamount to double deduction.
Ground No. 3 : The learned Commissioner of Income-tax (Appeals) ought to have considered the decision of the hon'ble High Court of Kerala in the case of Lissie Medical Institutions v. CIT (I. T. A. No. 42 of 2011) [2012] 348 ITR 344 (Ker).
Depreciation
7. In the grounds raised above, the Revenue challenges the order of the learned Commissioner of Income-tax (Appeals) in allowing the assessee's claim for depreciation of the addition to assets during the relevant period, even though the entire cost of these assets acquired in the relevant previous year has been claimed by the assessee as application of its income for its charitable activities. The learned Departmental representative submits that this finding on the part of the learned Commissioner of Income-tax (Appeals), has resulted in allowing double deduction to the assessee, which is not admissible in law as per the ratio laid down by the hon'ble apex court in the case of Escorts Ltd. v. Union of India reported in [1993] 199 ITR 43 (SC). It was also contended by the learned authorised representative that the learned Commissioner of Income-tax (Appeals) erred in not following the decision of the hon'ble Kerala High Court in the case of Lissie Medical Institutions v. CIT in (I. T. A. No. 42 of 2011) [2012] 348 ITR 344 (Ker) dated February 17, 2012. The learned Departmental representative prayed that in the light of the above, the order of the learned Commissioner of Income-tax (Appeals) on this point be reversed and that of the Assessing Officer be restored.
8. Per contra, the learned authorised representative placed support and relied on the impugned order of the learned Commis sioner of Income-tax (Appeals) on this issue. It was submitted that in allowing the assessee's claim for depreciation on addition to assets during the relevant period, the learned Commissioner of Income-tax (Appeals) followed the decision of the co-ordinate Bench of this Tribunal in the case of one of the assessee's group trusts, i.e., Dr. T. M. A. Pai Foundation in I. T. A. Nos. 486 to 491 (Bang)/2009 dated February 16, 2010 for the assessment years 2001- 02 to 2006-07. It was further submitted by the learned authorised representative that the decision of the hon'ble Kerala High Court in the case of Lissie Medical Institutions (supra), relied on by the Revenue, was dealt with by a co-ordinate Bench of the Tribunal in the case of Asst. CIT v. Shri Adichunchanagiri Shikshana Trust reported in [2012] 19 ITR (Trib) 828 (Bang) ; 49 ITCL 544. The learned authorised representative submitted that, subsequent to the passing of the impugned order by the learned Commissioner of Income-tax (Appeals), another co-ordinate Bench of the Tribunal in the case of a Group Trust, Dr. T. M. A. Pai Foundation has held the very same issue, of the allowability of depreciation on addition to assets during the relevant period, in favour of the assessee in I. T. A. No. 1140/Bang/2013 dated March 21, 2014. The learned authorised representative submitted that, in view of the favourable decisions of the hon'ble courts and of the co-ordinate Bench of this jurisdictional Tribunal referred to and placed reliance upon, the Revenue's appeal is liable to be dismissed.
9. We have heard both parties and perused and carefully consid ered the material on record, including the judicial decisions cited and placed reliance upon. We find the issue of the assessee's claim for depreciation on addition to assets acquired in the relevant period is to be allowed even if the entire cost of the same assets have been claimed by the assessee and allowed as application of its income for charitable purposes, since this issue has been held in favour of the assessee in a number of decisions of the co-ordinate Bench of this Tribunal in the cases of Dr. T. M. A. Pai Foundation (supra), Acad emy of General Education (supra), Asst. CIT v. Shri Adichunchana giri Shikshana Trust [2012] 19 ITR (Trib) 828 (Bang), etc., following the decision of the hon'ble Bombay High Court in the case of CIT v. Institute of Banking [2003] 264 ITR 110 (Bom).
10. Following the decisions of the hon'ble Bombay High Court in the case of Institute of Banking (supra) and of the co-ordinate Benches (cited supra in this para), we uphold the order of the learned Commissioner of Income-tax (Appeals) in allowing the assessee's claim for depreciation on new assets acquired and put into use during the relevant previous year under consideration, even if the entire cost of those assets have been claimed by the assessee and allowed as application of its income for charitable purposes. We, consequently, dismiss grounds Nos. 1 to 3 raised by the Revenue."
7. Following the above, we are of the opinion that the Commissioner of Income-tax (Appeals) was justified in taking the view that the claim of the assessee was allowable. We do not find any reason to interfere with the order of the Commissioner of Income-tax (Appeals).
8. In the result, the appeal of the Revenue stands dismissed.
The order pronounced in the open court on the 11th day of June, 2015.