ITO (E) 2(3), MUMBAI v. SADGURU SEVA TRUST, MUMBAI

ITA 3387/MUM/2015 | 2008-2009
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 338719914 RSA 2015
Assessee PAN AAATS0575N
Bench Mumbai
Appeal Number ITA 3387/MUM/2015
Duration Of Justice 1 month(s) 26 day(s)
Appellant ITO (E) 2(3), MUMBAI
Respondent SADGURU SEVA TRUST, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 31-07-2015
Assessment Year 2008-2009
Appeal Filed On 04-06-2015
Judgment Text
- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI . . BEFORE SHRI R.C. SHARMA ACCOUNTANT MEMBER . / ITA NO.3387/MUM/2015 . / ITA NO.3388/MUM/2015 . / ITA NO.3389/MUM/2015 ( / ASSESSMENT YEARS : 2008-09 2009-10 & 2010-11 ) ITO - (E) 2(3) R.NO.513 PIRAMAL CHAMBERS LAL BAUG PAREL MUMBAI-400012 .. / APPELLANT V/S SHRI SADGURU SEVA TRUST 4 TH FLOOR MAFATLAL HOUSE BACKBAY RECLAMATION MUMBAI-400020 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AAATS0575N REVENUE BY : SHRI JAVED AKHTAR (DR) RESPONDENT BY : SMT. ARATI VASSANJI ' # $ % & / DATE OF HEARING 27.07.2015 '( $ % & / DATE OF ORDER 31.07.2015 / ORDER . . !' / PER R.C. SHARMA A.M. THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINS T COMMON ORDER DATED 19.03.2015 PASSED BY THE LEARNED COMMIS SIONER SADGURU SEVA TRUST 2 (APPEALS)1 MUMBAI FOR THE ASSESSMENT PASSED UNDER SECTION 143(3) FOR THE ASSESSMENT YEARS 2008-09 2009-10 & 2010-11 RESPECTIVELY. IT IS SEEN THAT THE ISSUES RAISED IN ALL THESE APPEA LS ARE COMMON. FOR THE SAKE OF READY REFERENCE GROUNDS RAISED BY THE RE VENUE IN THE APPEAL MEMO IN ITA NO.3387/M/2015 FOR THE A.Y. 2008 -09 ARE REPRODUCED HEREUNDER:- 1. WHETHER ON THE FACTS OF THE CASE AND IN LAW THE ID.C IT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON ACCO UNT OF DISALLOWING DEPRECIATION ON FIXED ASSETS OF RS 1 76 73 379/- IN CONTRAVENTION OF THE DECISION OF ESCORTS LTD. VS. UOL 199 ITR 43 WHEREIN IT WAS HELD THAT SINCE SECTION 11 OF THE INCOME TAX ACT PROVIDES FOR DEDUCTION CAPITAL EXPENDITURE INCURRED O N ASSETS ACQUIRED FOR THE OBJECTS OF THE TRUST AS APPLICATION AND DOES NOT SPECIFICALLY & EXPRESSLY PROVIDE FOR DOUBLE DEDUCTIO N ON ACCOUNT OF DEPRECIATION ON THE SAME VERY ASSETS ACQUIRED FRO M SUCH CAPITAL EXPENDITURE NO DEDUCTION SHALL BE ALLOWED U /S. 32 FOR THE SAME OR ANY OTHER PREVIOUS YEAR IN RESPECT OF THAT ASS ET AS IT AMOUNTS TO CLAIMING A DOUBLE DEDUCTION. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE ID.CIT(A) ERRED IN ALLOWING THE APPEA L WHEN THE DELHI HIGH COURT IN THE CASE OF CHARANJIV CHARITABLE TRUST AND KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTI TUTIONS 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 OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT OF RS. 3 22 34 482/ - AND ALLOWING SET OFF AGAINST THE INCOME OF THE SUBSEQU ENT YEARS ALLOWING THE DEFICIT WILL TANTAMOUNT TO DOUBLE DEDUCTI ON ON ACCOUNT OF EXPENDITURE OUT OF EXEMPT INCOME. 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD CIT(A) ERRED IN ALLOWING TO CARRY FORWARD OF DEFICIT ON ACCOUNT OF EXCESS EXPENDITURE AND DIRECTI NG THE ASSESSING OFFICER TO ALLOW CARRY FORWARD OF DEFICIT ON ACCOUNT OF EXCESS EXPENDITURE WITHOUT APPRECIATING THE FACT THAT THIS WOULD SADGURU SEVA TRUST 3 HAVE THE EFFECT OF GRANTING DOUBLE BENEFIT TO THE ASSES SEE FIRST AS 'ACCUMULATION' OF INCOME U/S. 11(1)(A) OR AS CORP US DONATION U/S 11 (1)(D) IN EARLIER YEARS/CURRENT YEAR AND THEN AS 'APPLICATION' OF INCOME U/S 11 (1)(A) IN THE SUBSEQ UENT YEARS WHICH WAS LEGALLY NOT PERMISSIBLE.? 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT IGNO RING THE FACT THAT THERE WAS NO EXPRESS PROVISION IN THE I T ACT 1961 PERMITTING ALLOWANCE OF SUCH CLAIM. 6. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSI ONER 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. 2. THE GROUNDS NO. 1 & 2 OF ALL THESE THREE APPEALS ADDRESS THE ISSUE OF DISALLOWANCE OF THE DEPRECIATION ON FIXED ASSETS MADE BY THE AO ON THE GROUND THAT THE ASSESSEE HAD ALREADY CLAIM ED DEDUCTION OF THE CAPITAL EXPENDITURE INCURRED ON ASSETS AS APPLICAT ION. THIS CLAIM WAS ALLOWED BY THE CIT(A) AND THEREFORE NOW REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. GROUNDS NO. 3 4 & 5 OF ALL THE SE THREE APPEALS DEAL WITH THE ISSUE OF ALLOWING THE CARRY FORWARD OF DEFICIT AND ALLOWING THE SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS . GROUNDS NO. 6 & 7 OF ALL THESE THREE APPEALS ARE GENERAL AND DO NO T NEED ANY SPECIFIC ADJUDICATION. 3. I SHALL FIRST TAKE UP GROUNDS NO. 1 AND 2 DEALIN G WITH THE DISALLOWANCE OF DEPRECIATION. THE BRIEF FACTS AS CUL LED OUT FROM ORDERS SADGURU SEVA TRUST 4 OF THE AUTHORITIES BELOW ARE THAT THE ASSESSEE IS A TR UST CLAIMING THE BENEFIT OF EXEMPTION U/S. 11(1) OF THE I.T. ACT 196 1. IN THE ASSESSMENT ORDER THE AO DISALLOWED DEPRECIATION ON TH E GROUND THAT THE ASSESSEE HAS ALREADY CLAIMED BENEFIT OF CAPITAL EX PENDITURE INCURRED ON THE ACQUISITION OF IMPUGNED CAPITAL ASSE T AS PART OF APPLICATION AND THEREFORE CLAIMING THE DEPRECIATION ON THE SAME VERY ASSET WOULD BE AMOUNTING TO DOUBLE DEDUCTION. BEING AG GRIEVED THE ASSESSEE TRUST CONTESTED THE MATTER BEFORE THE CIT(A) A ND THE LD. CIT(A) ALLOWED THE BENEFIT OF DEPRECIATION RELYING U PON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. INSTI TUTE OF BANKING PERSONAL 264 ITR 110 (BOM). THE OPERATIVE PARA OF THE ORDER OF THE LD CIT(A) IS REPRODUCED HEREUNDER FOR THE SAKE OF RE ADY REFERENCE: 5.2 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES O F THE CASE THE ASSESSMENT ORDER OF THE A.O. AND THE SUBMISSIONS OF THE APPELLANT. THE DECISION OF THE HON. JURISDICTIONAL HIG H COURT IN CIT VS. INSTITUTE OF BANKING PERSONAL (264 ITR 110) O N THE ISSUE OF ALLOWANCE OF DEPRECIATION IS IN FAVOUR OF THE APPE LLANT. THE AO HAS NOT GIVEN ANY OTHER REASON FOR DISALLOWANCE OF D EPRECIATION AND RELIED ON THE DECISION OF THE HON. APEX COURT I N ESCORTS LIMITED CASE (199 ITR). IN FACT THE DECISION OF THE HON. JURISDICTION COURT IN CIT VS. INSTITUTE OF BANKING PERS ONNEL SELECTION (2003) 185 CTR 492 (BOM) IS APPLICABLE IN THIS CASE. AS PER DECISION OF THE HON. HIGHER JUDICIAL AUTHORI TIES ON THIS ISSUE DEPRECIATION IS ALLOWABLE AS CLAIMED BY THE AP PELLANT. 4. BEFORE ME LD. DR HAS VEHEMENTLY CONTESTED THE ORD ER OF CIT(A). IT WAS SUBMITTED BY HIM THAT THE CLAIM OF THE ASSESSEE IS LEADING TO DOUBLE DEDUCTION IN THE SENSE THAT ON THE O NE HAND THE SADGURU SEVA TRUST 5 ASSESSEE IS TAKING THE BENEFIT OF CAPITAL EXPENDITUR E INCURRED AT THE TIME OF ACQUISITION OF CAPITAL ASSET AS PART OF APPLIC ATION OF INCOME AND ON THE OTHER HAND THE ASSESSEE IS SIMULTANEOUSLY SEE KING TO CLAIM THE BENEFIT OF DEPRECIATION ON THESE VERY ASSETS ON WHICH HE HAS ALREADY TAKEN THE BENEFIT OF CAPITAL EXPENDITURE AS PART OF AP PLICATION OF INCOME. IT WAS FURTHER SUBMITTED BY HIM THAT THE AFORES AID JUDGMENT OF HONBLE BOMBAY HIGH COURT HAS BEEN PASSED WITHOUT CONSIDERING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF ESCORT LIMITED VS. UOI (199 ITR 43) AND THEREFORE THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IS PER INCURIUM TO THIS EXTENT AND RESULTANTLY THE SAME IS NOT BINDING UPON THE TRIBUNAL. HE FURTHER PLACED RELIANCE ON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CAS E OF DIRECTOR OF INCOME TAX (E) VS. CHARANJIV CHARITABLE TRUST ORDER DATED 18 TH MARCH 2014 IN ITA NO.321/2013 ITA NO.322/2013 & ITA NO.3 23/2013 THE COPY OF THIS JUDGMENT WAS PLACED BEFORE US AND SPECI FIC RELIANCE WAS PLACED AT PAGE 35 OF PARA 30 OF THIS JUDGMENT. THE RE LEVANT PARA AS RELIED UPON BY THE LD DR IS REPRODUCED HEREUNDER FO R THE SAKE OF READY REFERENCE: 30. SO FAR AS THE CLAIM OF DEPRECIATION IS CONCERNE D THE DECISION OF THE TRIBUNAL CANNOT BE COUNTENANCED. THE TRIBUNAL H AS OVERLOOKED THAT THE COST OF THE ASSETS HAS ALREADY BEE N ALLOWED AS A DEDUCTION AS APPLICATION OF INCOME AS HELD BY THE CIT (APPEALS) AS WELL AS THE ASSESSING OFFICER. IT WAS TH EIR VIEW THAT ALLOWING DEPRECIATION IN RESPECT OF ASSETS THE COST O F WHICH WAS EARLIER ALLOWED AS DEDUCTION AS APPLICATION OF INCO ME THE TRUST SADGURU SEVA TRUST 6 WOULD ACTUALLY AMOUNT TO DOUBLE DEDUCTION ON THE BASIS OF THE RULING OF THE SUPREME COURT IN ESCORTS LTD. VS. UOL ( SUPRA). IN RESPECT OF THE ADDITIONS TO THE FIXED ASSETS MADE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2006-0 7 THE CIT (APPEALS) HELD THAT SINCE THE COST OF THE ASSETS WAS NOT ALLOWED AS A DEDUCTION BY WAY OF APPLICATION OF INCOME DEP RECIATION SHOULD BE ALLOW. THE CIT (APPEALS) HAS THUS MADE A DISTINCTION BETWEEN ASSETS THE COST OF WHICH WAS ALLOWED AS DEDU CTION AS APPLICATION OF INCOME AND ASSETS THE COST OF WHICH W AS NOT SO ALLOWED. THE TRIBUNAL HAS NOT KEPT THIS DISTINCTION IN VIEW BUT HAS PROCEEDED TO RELY UPON A JUDGMENT OF THIS COURT IN DLT VS. VISHWA JAGRATI MISSION (SUPRA). IN THE JUDGMENT OF TH IS COURT THE QUESTION WAS WHETHER THE INCOME OF THE ASSESSEE WHI CH WAS A CHARITABLE TRUST SHOULD BE COMPUTED ON COMMERCIAL PR INCIPLES AND IF SO WHETHER DEPRECIATION ON FIXED ASSETS USED FOR CHARITABLE' PURPOSES SHOULD BE ALLOWED AS A DEDUCTION . THIS COURT NOTICED THAT THERE WAS A CONSENSUS OF JUDICIAL OPINI ON ON THIS ASPECT AND HELD AFTER REFERRING TO THOSE AUTHORITIE S AS WELL AS A CIRCULAR OF THE CBDT ISSUED ON 19.07.1968 THAT WHILE COMPUTING THE INCOME OF THE TRUST AVAILABLE FOR APPLICATION FOR CHARITABLE PURPOSES DEPRECIATION ON ASSETS USED FOR CHARITABLE PURPOSES SHOULD BE ALLOWED. THE POINT TO BE NOTICED IS THAT IN THIS JUDGMENT THIS COURT REFERRED TO AND DISTINGUISHED THE JUDGMENT OF THE SUPREME COURT IN ESCORTS LTD. (SUPRA) ON THE GROUND THAT IN ESCORTS (SUPRA) THE SUPREME COURT WAS CONCERNED WITH A CASE WHERE THE DEDUCTION OF THE COST OF THE ASSET WAS ALLOWE D UNDER SECTION 35(1) AS CAPITAL EXPENDITURE INCURRED ON SCIE NTIFIC RESEARCH AND THEREFORE NO DEDUCTION FOR DEPRECIATIO N ON THE VERY SAME ASSETS' WAS HELD ALLOWABLE UNDER GENERAL P RINCIPLES OF TAXATION AS IT WOULD AMOUNT TO DOUBLE DEDUCTION'. TH E JUDGMENT OF THIS COURT IN DIT VS. VISHWAJAGRATI MISSION REINFOR CES THE PRINCIPLE THAT IF THE COST OF THE ASSET HAS BEEN ALLOWE D AS DEDUCTION BY WAY OF APPLICATION OF INCOME THEN DEPREC IATION ON THE SAME ASSET CANNOT BE ALLOWED IN THE COMPUTATION OF THE INCOME OF THE TRUST. THE DISTINCTION HAS NOT BEEN KEPT IN VIEW BY THE TRIBUNAL WHICH SEEMS TO HAVE ERRONEOUSLY RELIED ON THE JUDGMENT OF THIS COURT TO DIRECT ALLOWANCE OF DEPRECI ATION EVEN IN RESPECT OF ASSETS THE COST OF WHICH HAS ALREADY BEEN ALLOWED AS APPLICATION OF INCOME. WE ACCORDINGLY HOLD THAT THE TR IBUNAL WAS NOT JUSTIFIED IN DIRECTING THE ALLOWANCE OF DEPRECIATI ON IN RESPECT OF SUCH ASSETS. SADGURU SEVA TRUST 7 5. FURTHER RELIANCE WAS PLACED BY LD. DR ON THE JUDGM ENT OF HONBLE KERALA HIGH COURT IN THE CASE OF LISSIE MEDIC AL INSTITUTIONS VS. CIT IN ITA NO.42 OF 2011 DATED 17 TH FEBRUARY 2012. ACCORDING TO LD. DR HONBLE KERALA HIGH COURT HAS ALSO FOLLOWED THE J UDGMENT OF HONBLE SUPREME COURT IN THE CASE OF ESCORT LIMITED (S UPRA) AND HAS REJECTED THE CLAIM OF DEPRECIATION. THE LD. DR FURTHE R PLACED RELIANCE UPON THE RECENT AMENDMENT MADE IN SECTION 11 BY FINAN CE ACT 2014. HE HAS READ BEFORE US SUB-SECTION (6) INSERTED TO SEC TION 11 W.E.F. 01.04.2015. THE SAME IS REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE: [(6) IN THIS SECTION WHERE ANY INCOME IS REQUIRED TO BE APPLIED OR ACCUMULATED OR SET APART FOR APPLICATION THEN FOR SUCH PURPOSES THE INCOME SHALL BE DETERMINED WITHOUT ANY D EDUCTION OR ALLOWANCE BY WAY OF DEPRECIATION OR OTHERWISE IN R ESPECT OF ANY ASSET ACQUISITION OF WHICH HAS BEEN CLAIMED AS AN APPLICATION OF INCOME UNDER THIS SECTION IN THE SAME O R ANY OTHER PREVIOUS YEAR. 6. THE LD. DR REQUESTED FOR CONFIRMATION THE ORDER OF AO AND FOR ALLOWING THE APPEAL OF THE DEPARTMENT. ON THE OTHER HA ND LD. COUNSEL OF THE ASSESSEE TRUST MADE HER SUBMISSIONS IN DETAI L AND SUBMITTED THAT THE ORDER OF CIT(A)IS VERY MUCH IN ACCORDANCE WITH LAW AND THE FACTS AND THE SAME NEEDS TO BE UPHELD. HER ARGUMENTS A RE IN TWO PARTS. ONE THE ASSESSEEE HAS BEEN GETTING THE BENEFIT OF CLAIM OF DEPRECIATION IN THE SIMILAR MANNER ON THESE VERY ASS ETS SINCE LAST MANY YEARS. HE HAS PLACED BEFORE US THE COPIES OF A SSESSMENT ORDERS SADGURU SEVA TRUST 8 PASSED U/S 143(3) FOR A.Y. 2003-04 TO A.Y. 2007-08 A T PAPER BOOK PAGES 1 TO 13. SECOND PART OF HER ARGUMENT IS THAT TH E JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IS BINDING UPON THE TRIBUNAL AND THEREFORE THE ASSESSEE IS ENTITLED FOR THE BENEFIT OF DE PRECIATION. IN ADDITION TO THE ABOVE SHE HAS FURTHER RELIED UPON THE JUDGMENT OF OTHER HIGH COURTS AND COPIES OF WHICH HAVE BEEN PLACE D IN THE PAPER BOOK AS PER DETAILS GIVEN BELOW: (I) CIT V. INSTITUTE OF BANKING BOMBAY HIGH COURT (20 03) 264 ITR 110 (II) CIT V. DEVI SAKUNTALA THARAL CHARITABLE FOUNDATI ON (2013) 358 ITR452 (MP) (III) CIT VS. SILIGURI REGULATED MARKET COMMITTEE (201 4) 366 ITR 51 (CAL) (IV) DIRECTOR OF INCOME TAX V. VISHWA JAGRITI MISSIO N (2012) 73 DTR 195 (DEL.) (V) CIT VS. MARKET COMMITTEE PIPLI (2011) 330 ITR 16 (PUNJAB & HARYANA) (VI) CIT VS. TINY TOTS EDUCATIONAL SOCIETY (2011) 330 ITR 21 (PUNJAB & HARYANA) 7. SHE FURTHER SUBMITTED THAT THE DECISION IN THE CASE O F ESCORT LIMITED (SUPRA) RELIED UPON BY THE AO HAS BEEN DISCU SSED AND DISTINGUISHED IN THE JUDICIAL PRONOUNCEMENT MENTIONED AT SERIAL NO. IV TO VI ABOVE. SHE FURTHER SUBMITTED THAT RULE OF CONSIST ENCY SHOULD ALSO BE APPLIED ESPECIALLY IN VIEW OF JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. GOPAL PUROHIT 336 ITR 287 (BOM) AND ARONI COMMERCIAL LTD. VS. DCIT & OTHERS (2014) 362 ITR 403 (BOM). SHE FURTHER SUBMITTED THAT THE AMENDMENT MADE TO SECTION 11 IS PROSPECTIVE AND IS NOT TO BE APPLIED RETROSPECTIVELY IN THE ASSESSMENT SADGURU SEVA TRUST 9 YEAR UNDER CONSIDERATION IN THIS APPEAL. SHE REQUESTE D FOR CONFIRMING THE ORDER OF CIT(A) AND DISMISSING THE APPEAL FILED B Y THE REVENUE. I HAVE HEARD BOTH THE PARTIES AT LENGTH AND HAVE GOIN G THROUGH THE JUDGMENTS FILED BY BOTH THE PARTIES. IN MY CONSIDERED OPINION THE JUDGMENT OF JURISDICTIONAL HIGH COURT IS BINDING UPON THE TRIBUNAL AND THEREFORE THE ASSESSEE DESERVES TO SUCCEED ON THIS GR OUND ITSELF. IN ADDITION TO THAT IT IS FURTHER SEEN BY ME THAT THE JUD GMENT OF HONBLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED (SUPRA) HAS BEEN DISCUSSED AND DISTINGUISHED BY HONBLE DELHI HIGH CO URT AND HONBLE PUNJAB AND HARYANA HIGH COURT IN THE JUDGMENTS CITED BY LD. COUNSEL OF THE ASSESSEE. THE JUDGMENT OF THE HONBLE JURISDI CTIONAL HIGH COURT IS BINDING UPON BY THE TRIBUNAL AS WAS HELD BY THE HO NBLE M.P. HIGH COURT IN THE CASE OF NATIONAL TEXTILE CORPORATION 216 C TR 153 IN WHICH IT WAS HELD THAT THE LOWER COURTS ARE BOUND TO FOLLOW THE JUDGMENT OF SUPERIOR COURTS AS PER CONSTITUTIONAL FRAME WORK OF O UR COUNTRY. 8. IT IS FURTHER SEEN BY ME THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. INDRAPRASTHA CANCER SOCIETY IN ITA N O.240/2014 DATED 18 TH NOVEMBER 2014 HAS DISCUSSED AT LENGTH THE ENTIRE LAW AVAILABLE AS ON THAT DATE ON THIS ISSUE INCLUDING THE JUDGMENTS RELIED UPON BY THE LD. DR IN THE CASE OF ESCORTS LTD. (SUPRA) CHARAN JIV CHARITABLE TRUST (SUPRA) AND LISSIE MEDICAL INSTITUTIONS (SUPR A) AND AFTER ANALYZING ALL THESE JUDGMENTS IT WAS HELD THAT THE ASS ESSEE WAS SADGURU SEVA TRUST 10 ENTITLED FOR THE CLAIM OF DEPRECIATION AND VIEW TAKEN BY THE JURISDICTIONAL HIGH COURT OF BOMBAY WAS FOLLOWED BY HONBLE DELHI HIGH COURT IN THE CASE OF INDRAPRASTHA CANCER SOCIETY (SUPR A). IT IS FURTHER SEEN BY ME THAT HONBLE DELHI HIGH COURT HAS ALSO CO NSIDERED AMENDMENT MADE BY THE FINANCE ACT 2014 AND IT WAS HELD BY HONBLE DELHI HIGH COURT THAT THE AMENDMENT IS PROSPECTIVE AND CANNOT BE APPLIED RETROSPECTIVELY. PARA 11 OF THE SAID JUDGMENT IS REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE:- BY FINANCE (NO.2) ACT OF 2014 SUB-SECTION (6) OF SECTION 11 STANDS INSERTED WITH EFFECT FROM 1 ST APRIL 2005 TO THE EFFECT THAT WHERE ANY INCOME IS REQUIRED TO BE APPLIED ACCUMUL ATED OR SET APART FOR APPLICATION THEN FOR SUCH PURPOSES THE IN COME SHALL BE DETERMINED WITHOUT ANY DEDUCTION OR ALLOWANCE BY WAY O F DEPRECIATION OR OTHERWISE IN RESPECT OF AN ASSET THE ACQUISITION OF WHICH HAS BEEN CLAIMED AS APPLICATION OF INCOME U NDER THIS SECTION IN THE SAME OR ANY OTHER PREVIOUS YEAR. THE LEGAL POSITION THEREFORE WOULD UNDERGO A CHANGE IN TERMS OF SECTION 11(6) WHICH HAS BEEN INSERTED AND APPLICABLE WITH EF FECT FROM 1 ST APRIL 20015 AND NOT TO THE ASSESSMENT YEARS IN QUESTIO N. 9. IN ADDITION TO ABOVE IT IS FURTHER SEEN BY ME THA T THE ASSESSEE HAS BEEN GETTING THE BENEFIT OF DEPRECIATION IN ALL PREVIOUS YEARS AND THEREFORE AS A MATTER OF PRINCIPLE OF CONSISTENCY TH E ASSESSEE SHOULD BE ELIGIBLE TO GET THE BENEFIT OF DEPRECIATION IN THI S YEAR AS WELL AND FOR THIS PURPOSE I DERIVE SUPPORT FROM THE JUDGMENT OF H ONBLE SUPREME COURT IN THE CASE OF CIT V. EXCEL INDUSTRIES PVT. LTD. 258 ITR 295. THUS VIEWED FROM ALL THE ANGLES I FIND THAT THE ASSES SEE IS ELIGIBLE TO SADGURU SEVA TRUST 11 CLAIM DEPRECIATION AND THE SAME IS DIRECTED TO BE A LLOWED AND GROUNDS RAISED BY DEPARTMENT ARE DISMISSED. 10. NOW I SHALL TAKE UP GROUND NO.3 4 & 6 DEALIN G WITH THE PROVISIONS OF THE BENEFIT OF CARRY FORWARD OF DEFICI T OF RS.3 22 34 482/. IT IS SEEN THAT THE CIT(A) HAS ALLOWED THE GROUND OF THE ASSESSES IN PARA 6.3 WHICH IS REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE: I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT ORDER OF THE AO AND THE SUBMISSION OF THE AP PELLANT. THE ISSUE OF EXCESS APPLICATION OF EARLIER YEARS TO BE CARRIED FORWARD IS DECIDED IN FAVOUR OF THE APPELLANT IN THE DECISION OF THE HIGHER JUDICIAL FORUMS AS REFERRED AND RELIED BY THE APPELLANT. THEREFORE RESPECTFULLY FOLLOWING THE DECISIONS RELI ED UPON BY THE APPELLANT AND APPLICABLE UNDER THE FACTS AND CIRCUMST ANCES OF THE CASE GROUND NO.4 IS ALLOWED. HOWEVER THE AO IS DIR ECTED TO VERIFY THE CLAIM OF C/F. OF EARLIER YEAR DEFICITS THA T SUCH AMOUNTS ARE PART OF EXCESS EXPENDITURE OF EARLIER YEARS AND SUCH AMOUNTS ARE LIABLE TO BE CONSIDERED AS PART OF APPLICATION OF INCOME IN THE RESPECTIVE YEARS. IT MAY FURTHER BE VERIFIED THAT SUCH EXCESS EXPENDITURE OF EARLIER YEARS CLAIMED IS OUT OF INCO ME OF THE RESPECTIVE YEARS. BEFORE US THE LD. DR RELIED UPON THE ORDER OF LD. AO AND ON THE OTHER HAND LD. COUNSEL OF THE ASSESSEE RELIED UPON TH E ORDER OF CIT(A) AND ALSO ON THE JUDGMENT OF HONBLE BOMBAY HI GH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL (264 I TR 110) AND SUBMITTED THAT THE ASSESSEE WAS ELIGIBLE FOR THE BEN EFIT OF CARRY FORWARD AND THAT IS WHY CIT(A) HAS RIGHTLY ALLOWED THE SAME. SADGURU SEVA TRUST 12 I HAVE GOING THROUGH THE ARGUMENTS MADE BY BOTH THE S IDES AND IT IS SEEN BY ME THAT THE ISSUE IS COVERED BY THE AFORESAID JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT AND NO CONTRARY JUD GMENT HAS BEEN BROUGHT TO MY NOTICE BY THE LD DR APPEARING ON BEHALF OF THE REVENUE AND THEREFORE RESPECTFULLY FOLLOWING THE JUDGMENT OF H ONBLE HIGH COURT (BOM) I FIND NO SUBSTANCE IN THE GROUNDS RAISED BY REVENUE AND THEREFORE THESE ARE DISMISSED AND ORDER OF CIT(A) ON THIS ISSUE IS CONFIRMED. IN THE RESULT ALL THE APPEALS OF THE REVENUE ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DAY OF JULY 2015. SD/- . . R.C. SHARMA ACCOUNTANT MEMBER MUMBAI #$ DATED:31 .07.2015 PATEL $ %)* +*% / COPY OF THE ORDER FORWARDED TO : (1) % / THE ASSESSEE; (2) - / THE REVENUE; (3) ' .%( ) / THE CIT(A); (4) ' .% / THE CIT MUMBAI CITY CONCERNED; (5) *12 %3 & 3 ' # / THE DR ITAT MUMBAI;