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Section 11 of the Income Tax Act, 1961-Trust-Exemption to trust-Application of income for acquiring an asset was different from the claim for depreciation in relation to the use for application of the asset for achieving the stated object or purpose of a charitable trust

BOMBAY HIGH COURT

 

I. T. A. No. 1311 of 2013

 

Director of Income-Tax (Exemptions) .......................................................................Appellant.
V
Gem And Jewellery Export Promotion Council...........................................................Respondent

 

S. C. Dharmadhikari And A. K. Menon, JJ.

 
Date :April 1, 2015
 
Appearances

A. R. Malhotra, N. A. Kazi For the Petitioner :
Kunal Vajani, Kunal Vaishnav, M/s. Wadia Ghandy and Co. For the Respondent :


Section 11 of the Income Tax Act, 1961 — Trust — Exemption to trust — Application of income for acquiring an asset  was different from the claim for depreciation  in relation to the use for application of the asset for achieving the stated object or purpose of a charitable trust, therefore ,the depreciation  in respect of capital expenditure was allowable and no question of double deduction arise — Director of income Tax vs. Gem and Jewellery Export Promotion Council.


JUDGMENT


1. This appeal of the Revenue challenges the order passed by the Income- tax Appellate Tribunal, Bench at Mumbai, dated December 19, 2012 for the assessment year 2008-09.

2. The allowability of depreciation in respect of capital expenditure incurred by the assessee-trust and for the purpose of section 11 of the Income-tax Act, 1961, was the issue before the Tribunal. It held that the difference between application of income for acquiring an asset and the claim for depreciation which is in relation to the use or application of the asset for achieving the stated object or purpose has to be borne in mind. If it is borne in mind, then, there is no question of double deduction as is apprehended in such matters by the Revenue.

3. In reaching this conclusion, the Tribunal has followed the view taken by this court in the case of CIT v. Institute of Banking [2003] 264 ITR 110 (Bom).

4. The Revenue's appeal has been dismissed following a Division Bench judgment.

5. A Division Bench of this court had occasion to consider similar questions (ITXA No. 797 of 2012 decided on September 26, 2014, Bench comprising of S. C. Dharmadhikari and A. K. Menon JJ. and later order of November 20, 2014 in ITXA No. 1305 of 2012 and 22 of 2013, Bench comprising of S. C. Dharmadhikari and A. A. Sayed JJ.). The Division Benches of this Court have consistently held that the Revenue's understanding of double deduction is without legal basis. In such circumstances, the questions of law at pages 3 and 4 of the paper-book cannot be entertained as they are covered by the decisions of this court.

6. The appeal is, therefore, dismissed. There will be no order as to costs.

 

[2016] 384 ITR 412 (BOM)

 
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