DCIT, Udupi v. M/s. Manipal Education Network, Manipal

ITA 480/BANG/2009 | 2006-2007
Pronouncement Date: 16-02-2010 | Result: Allowed

Appeal Details

RSA Number 48021114 RSA 2009
Bench Bangalore
Appeal Number ITA 480/BANG/2009
Duration Of Justice 8 month(s) 29 day(s)
Appellant DCIT, Udupi
Respondent M/s. Manipal Education Network, Manipal
Appeal Type Income Tax Appeal
Pronouncement Date 16-02-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-02-2010
Date Of Final Hearing 01-12-2009
Next Hearing Date 01-12-2009
Assessment Year 2006-2007
Appeal Filed On 18-05-2009
Judgment Text
ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 1 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A' BEFORE SHRI. K. P. T. THANGAL VICE PRESIDENT AND SHRI. N. L. KALRA ACCOUNTANT MEMBER 1. I.T.A.NO.480/BANG/2009 (ASSESSMENT YEAR : 2006-07 ) 2-6. I.T.A.NOS.481 TO 485/BANG/2009 (ASSESSMENT YEARS : 2002-03 TO 2 006-07) 7-12. I.T.A.NOS.486 TO 491/BANG/2009 (ASSESSMENT YEARS : 2001-02 TO 2 006-07) DEPUTY COMMISSIONER OF INCOME TAX CIRCLE -1 UDUPI .. APPELLANT V. 1. M/S. MANIPAL EDUCATION NETWORK UPENDRA NAGAR MANIPAL 2-6. M/S. ACADEMY OF GENERAL EDUCATION ACADEMY HOUSE MANIPAL 7-12. M/S. TMA PAI FOUNDATION SYNDICATE HOUSE MANIPAL .. RESP ONDENTS 13. CROSS OBJECTION NOS.28/BANG/2009 (IN I.T.A.NOS.480/BANG/2009) (ASSESSMENT YEAR : 200 6-07) (BY THE ASSESSEE) 14-18. CROSS OBJECTION NOS.29 TO 33/BANG/2009 (IN I.T.A.NOS.481 TO 485/BANG/2009) (ASSESSMENT YEARS : 2002-03 TO 2 006-07) (BY THE ASSESSEE) 19-24. CROSS OBJECTION NOS.34 TO 39 (IN I.T.A.NOS.486 TO 491/BANG/2009) (ASSESSMENT YEARS : 2001-02 TO 2 006-07) (BY THE ASSESSEE) ASSESSEE BY : SHRI. S. PARTHASARATHI REVENUE BY : SHRI. JASON P. BOAZ & SMT. PREETI GARG O R D E R PER K. P. T. THANGAL VICE PRESIDENT : THE APPEALS ARE BY THE REVENUE AND THE CROSS OBJEC TIONS ARE BY THE ASSESSEES FOR THE ASSESSMENT YEARS 2001-02 TO 2 006-07. SINCE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 2 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 CERTAIN ISSUES INVOLVED ARE COMMON IN ALL THESE APP EALS AND CROSS OBJECTIONS WE DISPOSE OFF THEM BY THIS CONSOLIDATE D ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.481/BANG/2009-M/S. ACADEMY OF GENERAL EDUCAT ION- ASSESSMENT YEAR 2002-03 : 2. THOUGH THE REVENUE HAS TAKEN AS MANY AS 11 GROUN DS GROUND NOS.1 10 AND 11 ARE GENERAL IN NATURE AND DO NOT C ALL FOR ANY SPECIFIC DEALING AS SUCH. THE OTHER GROUNDS ARE IDENTICAL O N ALL POINTS WHICH READ AS UNDER : I) THE LEARNED COMMISSIONER OF INCOME-TAX(A) ERRED IN ALLOWING ASSESSEE'S APPLICATION U/S.154 EVEN THOUGH THE SAME WAS BARRED BY LIMITATION U/S.154(7) OF THE INC OME TAX ACT. II) THE LEARNED COMMISSIONER OF INCOME-TAX(A) ERRED IN CONSIDERING ASSESSEE'S APPLICATION FOR RECTIFICATIO N IN RESPECT OF PROCESSING ORDER U/S.143(1) DT.13.3.200 3 EVEN THOUGH THE SAID PROCESSING ORDER IS NOT APPEALABLE ORDER AND ERRED IN ASSUMING JURISDICTION ON THE PROCESSIN G ORDERS WHEREIN NO ADJUSTMENTS WERE MADE WHICH IS AGAINST THE PROVISION OF SECTION 246(A) OF THE INCOME TAX ACT. III) THE LEARNED COMMISSIONER OF INCOME-TAX(A) ERRE D IN NOT TAKING COGNIZANCE OF THE FACT THAT THE MISTAKES POINTED OUT BY THE ASSESSEE IN THE APPLICATION FILED U/S.15 4 THAT IN THE RETURN (A) DONATION RECEIVED OF RS.2 93 99 450 (B) ENDOWMENT FUND RECEIPTS OF RS.41 300 AND (C) PROFIT ON SALE OF SHARES OF RS.1 63 22 821 WERE OMITTED TO BE INCLUDED WERE NON-EXISTENT SINCE THESE ITEMS OF IN COME ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 3 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 WERE INCLUDED IN THE TOTAL RECEIPTS OF RS.892M84M70 0 AND THEREFORE THERE WAS NO CAUSE OF ACTION FOR FILING APPLICATION U/S.154. IV) THE LEARNED COMMISSIONER OF INCOME-TAX(A) ERRED IN ALLOWING ASSESSEE'S APPLICATION U/S.154 EVEN THOUGH THE ISSUE OF ALLOWING CARRY FORWARD OF DEFICIT OF EARLI ER YEARS FOR SET OFF AGAINST THE SURPLUS OF SUBSEQUENT YEARS IS A DEBATABLE ISSUE ON WHICH MORE THAN ONE INTERPRETATI ON IS POSSIBLE AND HENCE IS AGAINST THE RATIO OF THE HON' BLE APEX COURT IN THE CASE OF T. S. BALARAM ITO V. VOLKART BROTHERS (1971) 82 ITR 50 (SC). V) THE LEARNED COMMISSIONER OF INCOME-TAX(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW CARRY FORW ARD OF DEFICIT OF EARLIER ASSESSMENT YEARS FOR SET OFF AGA INST THE SURPLUS OF SUBSEQUENT ASSESSMENT YEARS EVEN THOUGH THERE IS NO PROVISION IN THE INCOME TAX ACT TO ALLOW CARR Y FORWARD OF SUCH DEFICIT AND THE NUMBER OF YEARS FOR WHICH SUCH CARRY FORWARD CAN BE ALLOWED. THE LEARNED COMMISSI ONER OF INCOME-TAX(A) ERRED IN NOT SPECIFYING PROVISION OF THE INCOME TAX ACT WHILE DIRECTING THE ASSESSING OFFICE R TO ALLOW CARRY FORWARD OF DEFICIT. VI) THE LEARNED COMMISSIONER OF INCOME-TAX(A) ERRED IN ADMITTING ASSESSEE'S CLAIM FOR CARRY FORWARD OF DEF ICIT OF EARLIER ASSESSMENT YEARS FOR SET OFF AGAINST THE SU RPLUS OF SUBSEQUENT ASSESSMENT YEARS WHICH WAS NOT MADE IN THE RETURN OF INCOME AND HENCE AGAINST THE RATIO IN TH E CASE OF GOETZE (INDIA) LTD. V. COMMISSIONER OF INCOME-TAX (2006) 284 ITR 323 (SC) WHEREIN IT WAS HELD THAT ASSESSING ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 4 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 AUTHORITY HAS NO POWER TO ENTERTAIN CLAIM MADE OTHE RWISE THAN BY WAY OF REVISED RETURN. VII) THE LEARNED COMMISSIONER OF INCOME-TAX(A) ALSO ERRED IN NOT TAKING COGNIZANCE OF THE FACT THAT THE CLAIM FOR DEFICIT IN THE ASST.YEAR 2002-03 HAS ARISEN ON ACCO UNT OF DONATION OF RS.15 CRORES MADE TO DR. T. M. A PAI CONVENTION CENTRE AND NOT ON ACCOUNT OF APPLICATIO N OF INCOME FOR THE REGULAR ACTIVITIES OF THE TRUST AND WAS NOT DEBITED AS OPERATING EXPENSES. VIII) THE LEARNED COMMISSIONER OF INCOME-TAX(A) ERR ED IN PLACING RELIANCE ON THE DECISION IN THE CASE OF COMMISSIONER OF INCOME-TAX V. INSTITUTE OF BANKING -264 ITR 110 (BOMBAY) FOR ALLOWING CARRY FORWARD OF DEFI CIT FOR SET OFF EVEN THOUGH SAID DECISION WAS NOT PURSUED IN FURTHER APPEAL IN VIEW OF NIL TAX EFFECT INVOLVED AND AS P ER SECTION 268A OF THE INCOME TAX ACT 1961 THE SAID DECISION IS NOT BINDING ON THIS ASSESSEE. THE LEARNED COMMISSIONER OF INCOME-TAX(A) ALSO ERRED IN FAILING TO TAKE COGNIZA NCE OF THE DECISION OF HON'BLE APEX COURT IN THE CASE OF UNION OF INDIA V. DHARMENDRA TEXTILES PROCESSORS (2008) 306 ITR 277 (SC) WHEREIN THE APEX COURT HELD THAT THE HON'B LE HIGH COURTS CAN ONLY INTERPRET THE LAW AND NOT LEGI SLATE AND LEGISLATIVE CASUS OMISSUS CANNOT BE SUPPLIED BY JUD ICIAL INTERPRETATIVE PROCESS. 3. THE FACTS NARRATED BY THE COMMISSIONER OF INCOME -TAX(A) FOR ALL THE YEARS BRIEFLY IS AS UNDER. THE ASSESSEE I S A TRUST EVIDENCED BY DEED OF TRUST CARRYING ON THE ACTIVITIES IN THE FI ELD OF EDUCATION. THE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 5 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 ASSESSEE FILED RETURN FOR THE ASSESSMENT YEAR 2002- 03 ON 18.10.2002 DECLARING GROSS RECEIPTS OF RS.8 92 84 700/- AND TH E AMOUNT SPENT FOR CHARITABLE PURPOSE WAS SHOWN AT RS.19 14 49 623/- ( THE AMOUNT VARIES FOR THE OTHER YEARS OTHERWISE THE FACTS ARE IDENTICAL). FOR ALL THE FOUR YEARS ASSESSEE HAS SHOWN NIL TAXABLE INCOM E. RETURN WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY ASSE SSEE FILED A RECTIFICATION APPLICATION DT.17.11.2008 AND CLAIMED DEFICIT AMOUNTING TO RS.10 21 28 627/- SHOULD BE ALLOWED TO BE CARRIE D FORWARD AND REQUESTED THE ASSESSING OFFICER TO RECTIFY THE SAME . THE ASSESSING OFFICER REJECTED THE CLAIM OF SET OFF OF BROUGHT FO RWARD LOSSES VIDE ORDER U/S.154 DT.29.1.2009. AGGRIEVED BY THE ABOV E ORDER ASSESSEE APPROACHED THE FIRST APPELLATE AUTHORITY. 4. BEFORE THE COMMISSIONER OF INCOME-TAX(A) THE AS SESSEE SUBMITTED THAT THE APPEAL AGAINST 154 ORDER WAS CON SEQUENTIAL TO THE ASSESSMENT ORDER OF THE ASSESSING OFFICER FOR THE A SSESSMENT YEAR 2006-07. THE COMMISSIONER OF INCOME-TAX(A) NOTED T HAT THE THE ASSESSING OFFICER REJECTED THE ASSESSEE'S CONTENTIO N THAT EARLIER ASSESSMENT YEARS' COMPUTATION IS INCORRECT FOR THE REASON THAT COMPUTATION FOR EACH RELEVANT YEARS WERE MADE ON TH E BASIS OF THE STATEMENT FILED ALONG WITH THE RETURN. THE CLAIM V IDE LETTER DT.14.10.2008 THAT DURING THE ASSESSMENT YEAR 2002- 03 THE ASSESSEE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 6 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 MADE CONTRIBUTION OF RS.15 CRORES TO DR. T. M. A. P AI CONVENTION CENTRE THAT RESULTED IN DEFICIT OF RS.9 93 03 879/- HE HELD CANNOT BE ALLOWED AS CLAIMED TO BE CARRIED FORWARD AS THERE W AS NO MENTION OF ANY EXEMPTION OF RECEIPT AMOUNTING TO RS.8 92 84 70 0/-. FOR ASSESSMENT YEAR 2002-03 IT WAS MENTIONED THAT THE OPERATING RECEIPTS WAS RS.2 49 00 374/- WHILE THE DONATIONS R ECEIVED WAS RS.3 27 08 560/-. THE OPERATING EXPENSES WAS RS.3 93 87 885/- AND THERE WAS A SURPLUS. DEDUCTION OF 15% OF THE RECEI PTS WAS CLAIMED BUT NO CLAIM OF CARRY FORWARD OF DEFICIT WAS MADE. HENCE HE HELD THE CLAIM IS TO BE REJECTED. AGAIN ON THE SAME BASIS HE REJECTED THE CLAIM FOR SUBSEQUENT ASSESSMENT YEARS OF 2004-05 AND 2005 -06 AS WELL. THE DECISION RELIED BY THE ASSESSEE IN THE CASE OF COMMISSIONER OF INCOME-TAX V. SOCIETY OF THE SISTERS OF ST. ANNE (1 46 ITR 28) (KAR) AND IN THE CASE OF COMMISSIONER OF INCOME-TAX V. SH ETH MANILAL RACHHODDAS VISHRAM BHAVAN TRUST (1992) 198 ITR 598 AND OTHER DECISIONS WERE DISTINGUISHED. 5. THE ASSESSEE FURNISHED SIMILAR STATEMENT OF FACT S AND GROUNDS OF APPEAL RELATING TO DISALLOWANCE OF CLAIM FOR SET OFF OF BROUGHT FORWARD DEFICIT AMOUNTING TO RS. 10 21 81 627/-; RS .1 68 77 603/-; RS.2 40 61 633/- AND RS.2 45 25 219/- RESPECTIVELY FOR THE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 7 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 ASSESSMENT YEARS 2002-03 TO 2005-06. THE FACTS AS NARRATED BRIEFLY BY THE COMMISSIONER OF INCOME-TAX(A) IS AS UNDER : '5. THESE FOUR APPEALS ARE FILED AGAINST THE ORDER UNDER SECTION 154 PASSED BY THE ASSESSING OFFICER FOR THE ASST YEARS 2002-03 TO 2005-06. THE APPEALS HAVE ARISEN FROM THE FINDINGS OF THE ASSESSING OFFICER IN HIS ASSESS MENT ORDER FOR THE ASST YEAR 2006-07 WHEREIN THE ASSESSING OF FICER HAS RECORDED THAT IN ASST YEARS 2002-03 TO 2005-06 THE APPELLANT HAS NOT SPECIFIED AND CLAIMED THE AMOUNT OF DEFICITS (I.E. EXCESS OF EXPENDITURE OVER INCOME) T O BE CARRIED FORWARD. ACCORDINGLY THE ASSESSING OFFICER ISSUED LETTER DT.14.10.2008 PROPOSING TO DISALLOW THE CARRY FORWA RD AND BROUGHT FORWARD OF UNABSORBED EXPENSES FOR SET OFF IN ASST YEAR 2006-07. THE APPELLANT HAS FILED RETURN FOR E ACH YEAR SHOWING THE TOTAL INCOME AND THE TOTAL EXPENDITURE FROM ASST YEARS 2002-03 TO 2005-06. HOWEVER NEITHER THE APP ELLANT IN THE RETURNS NOR THE ASSESSING OFFICER IN THE ASS T ORDERS HAVE MENTIONED THE DETAILS OF DEFICITS TO BE CARRIE D FORWARD. AGAINST THE ASSESSING OFFICER'S PROPOSED RECTIFICAT ION UNDER SECTION 154 VIDE LETTER DT.14.10.2008 THE APPELLAN T HAS FILED LETTER DT.17.11.2008 WHEREIN THE APPELLANT HAS SHO WN THE GROSS RECEIPTS AND EXPENSES AND ALSO DETAILS OF YEA RWISE DEFICITS TO BE CARRIED FORWARD. ALL THESE DETAILS HAVE ALSO BEEN FURNISHED DURING THE COURSE OF APPELLANT PROCE EDINGS.' 6. COMING TO THE FACTS IT IS TO BE SEEN THAT THE OR DER OF THE COMMISSIONER OF INCOME-TAX(A) FOR ASSESSMENT YEAR 2 006-07 ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 8 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 DT.19.3.2009 WAS ANTERIOR TO THE COMMON ORDER U/S/1 54 WHICH IS NOW IN APPEAL BEFORE THE TRIBUNAL. IN THE ORDER DT.19. 3.09 FOR THE ASSESSMENT YEAR 2006-07 THE COMMISSIONER OF INCOME -TAX(A) HELD THE DONATIONS GIVEN BY A TRUST TO ANOTHER TRUST HAV ING 12AA REGISTRATION AND RECOGNITION U/S.80G WOULD AMOUNT TO APPLICATION OF THE INCOME BY THE DONER TRUST FOR THE FURTHERANCE O F ITS OBJECTIVES. CONSIDERING THIS THE COMMISSIONER OF INCOME-TAX(A) HELD THE CONTRIBUTION MADE BY THE ASSESSEE TO TMA PAI CONVEN TION CENTRE A UNIT OF MANIPAL ACADEMY OF HIGHER EDUCATION (MAHE F OR SHORT) FOR VARIOUS YEARS IS TO BE TREATED AS APPLICATION OF IN COME. AS REGARDS THE DEPRECIATION HE HELD THIS IS TO BE ALLOWED IN ADDIT ION TO THE COST OF ASSETS. IF THESE TWO CLAIMS ARE CONSIDERED IN EARL IER YEARS THEN THE INCOME DECLARED BY THE TRUST IN EARLIER ASSESSMENT YEARS WOULD REMAIN UNCHANGED. WHEN THE ASSESSEE DECLARED INCOME IN TH E RETURN WHICH HAS BEEN ASSED THEN THE DEFICIT I.E. THE EXCESS OF EXPENDITURE OVER INCOME IS LIABLE TO BE CARRIED FORWARD TO BE SET OF F AGAINST THE INCOME OF THE ASSESSEE IN SUBSEQUENT YEARS. HE FURTHER HE LD THE COMPUTATION OF THE AMOUNT OF LOSS DOES NOT BECOME FINAL UNLESS THE ASSESSING OFFICER NOTIFIES IN WRITING THE AMOUNT OF LOSS AS C OMPUTED BY HIM TO THE ASSESSEE. IF NO SUCH NOTICE WAS GIVEN BY THE A SSESSING OFFICER THE ASSESSEE IS ENTITLED TO HAVE THE LOSSES REDETERMINE D IN SUBSEQUENT YEARS THOUGH THE ASSESSEE HAD NOT FILED APPEAL AGAI NST THE NON- ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 9 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 DETERMINATION AS HE COULD NOT FILE THE APPEALS IN THE ABSENCE OF SUCH NOTICE. FOR THE ABOVE PROPOSITION HE RELIED ON TH E DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF COMMISSIONER O F INCOME-TAX V. KHUSHAL CHAND DAGA (1961) 42 ITR 177(SC). THE COMM ISSIONER OF INCOME-TAX(A) FURTHER HELD AS UNDER : 'IT IS SEEN THAT WHEREVER ASSESSMENTS UNDER SECTION 143(3) HAVE BEEN COMPLETED BY THE ASSESSING OFFICER IN EAR LIER ASSESSMENT YEARS THE ASSESSING OFFICER HAS DETERMI NED THE DEFICIT BUT NOT MENTIONED THE AMOUNT OF UNABSORBED EXPENSES TO BE CARRIED FORWARD. IN THIS REGARD TH E DECISIONS IN NEW AMBADI ESTATES PVT LTD. V. COMMIS SIONER OF INCOME-TAX (1971) 82 ITR 87 (MYSORE) AND COMMISSIONER OF INCOME-TAX V. MANMOHAN DAS (1966) 5 9 ITR 699 (SC) ARE RELEVANT WHEREIN THE COURTS HAVE HELD THAT THE ASSESSEE HAS A STATUTORY RIGHT AND THE ASS ESSING OFFICER HAS A CORRESPONDING DUTY TO SET OFF THE LOS S CARRIED FORWARD FROM ONE YEAR TO THE FOLLOWING YEAR. IF CA RRY FORWARD IS LATER ALLOWED IN APPELLATE OR REVISIONAL PROCEEDINGS OR AS A RESULT OF A REFERENCE AND BY TH AT TIME THE ASSESSMENT FOR THE YEAR OR YEARS FOLLOWING ARE COMPLETED THE OFFICER IS DUTY BOUND TO RECTIFY THE ASSESSMENTS BY ALLOWING PROPER SET OFF. SIMILAR DE CISIONS HAVE BEEN RENDERED IN KANAKA FILMS PVT LTD. V. ITO (1989) 43 TAXMANN 113/177 ITR 88 (MAD) AND ITO V. GUJARAT STATE CO-OP UNION (1985) 11 ITD 450 (AHMEDABAD TRIBUNAL).' ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 10 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 7. FOR THE REASONS MENTIONED ABOVE THE COMMISSIONER OF INCOME- TAX(A) HELD THE ASSESSING OFFICER CANNOT DEBAR THE ASSESSEE TO CLAIM THE SET OFF OF THE UNABSORBED EXPENSES WHICH HAS RI GHTLY ARISEN IN EARLIER ASSESSMENT YEARS BUT NOT SPECIFIED BY HIM IN THE RESPECTIVE RETURNS OF INCOME. HENCE HE HELD THE RECTIFICATION ORDER PASSED BY THE ASSESSING OFFICER U/S.154 (THE ORDERS RELEVANT FOR THE ASSESSMENT YEARS UNDER CONSIDERATION) DENYING THE CARRY FORWAR D OF THE DEFICIT ARE NOT CORRECT AND IT IS AGAINST THE PROVISIONS OF LAW. THE COMMISSIONER OF INCOME-TAX(A) DIRECTED THE ASSESSIN G OFFICER TO VERIFY THE DEFICIT AND ALLOW THE CARRY FORWARD OF D EFICIT REPRESENTED BY EXCESS OF EXPENDITURE OVER INCOME FOR ALL THE FOUR YEARS AND ALLOW THE BENEFIT OF SET OFF IN THE ASSESSMENT YEAR 2006-07. THE REVENUE IS IN APPEAL BEFORE US. 8. IN RESPECT OF ASSESSMENT YEAR 2006-07 THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSING OFFICER VIDE HIS LET TER DT.14.10.2008 WORKED OUT THE DEFICIT TO BE CARRIED FORWARD FOR TH E ASSESSMENT YEARS 2002-03 AND ONWARDS. THE ASSESSEE SUBMITTED BEFORE THE COMMISSIONER OF INCOME-TAX(A) THAT ASSESSEE HAS NOT CLAIMED THE DEFICIT TO BE CARRIED FORWARD AGAINST THE INCOME OF THE SUBSEQUENT YEARS. HOWEVER THE ASSESSEE SUBMITTED THE CLAIM W AS CORRECTLY MADE FOR ALL THE YEARS. IT WAS FURTHER SUBMITTED THAT I T WAS AT THE INSTANCE OF ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 11 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 THE ASSESSING OFFICER THE RECTIFICATION APPLICATION WAS FILED IN ORDER TO SET RIGHT THE MISTAKES WHATEVER THE ASSESSING OF FICER HAS POINTED OUT SO THAT THE CORRECT AMOUNT OF CARRY FORWARD OF DEFICIT IS ARRIVED AT FOR THE ASSESSMENT YEAR 2006-07. ACCORDING TO THE ASSESSEE THEREAFTER THE ASSESSING OFFICER HAS COME OUT WITH A DIFFERENT VIEW BY HOLDING THAT THESE ARE TIME BARRED AND ALSO THE DEC ISIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF T. S. BALARAM ITO V. VOLKART BROTHERS (1971) 82 ITR 50; KM SHARMA (2002) 254 ITR 772; GOETZE (INDIA) LTD. V. COMMISSIONER OF INCOME-TAX (2006) 284 ITR 323; SPECIAL BENCH DECISION OF THE ITAT AHMEDABAD IN TH E CASE OF ARAVIND BHAI H. SHAH V. ACIT (270 ITR 125) ARE DIST INGUISHABLE AND HENCE THEY ARE WRONGLY CITED. THE ASSESSEE FILED T HE RECTIFICATION APPLICATION U/S.154 ONLY TO FACILITATE AND TO ARRIV E AT THE CORRECT AMOUNT OF CARRY FORWARD OF DEFICIT FOR THE ASSESSME NT YEAR 2006-07. THE ASSESSEE FURTHER SUBMITTED IT HAD NO OBJECTION IN ADOPTING THE ORIGINAL FIGURE OF DEFICIT CLAIMED BY IT IF THE A SSESSING OFFICER DOES NOT MAKE ANY ADJUSTMENT TO THE INCOME AS ARRIVED AT IN HIS LETTER DT.14.10.2008. IT IS FURTHER THE CASE OF THE ASSES SEE THAT WHEN THE ASSESSING OFFICER WAS VERY SURE THAT THE ASSESSMENT WAS TIME BARRED THEN THERE WAS NO NEED FOR HIM TO DISCUSS ABOUT THE CONTRIBUTION MADE TO DR. T. M. A. PAI CONVENTION CENTRE. THE ASSESSE E FURTHER RELIED ON INSTRUCTION NO.1132 DT.5.1.1978 ISSUED BY THE CBDT WHICH READS AS ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 12 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 UNDER : 'THE PAYMENT OF A SUM BY ONE CHARITABLE TRUST TO AN OTHER FOR UTILIZATION BY THE DONEE TRUST TOWARDS ITS CHARITAB LE OBJECTS IS PROPER APPLICATION OF INCOME FOR CHARITABLE PURPOSE IN THE HANDS OF THE DONEE TRUST AND THE DONOR TRUST WILL NOT LOSE EXEMP TION UNDER SECTION 11 OF THE INCOME TAX ACT 1961'. 9. ONE OF THE OBJECTION TAKE BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME-TAX(A) WAS THAT IN THE CASE OF A TRUST SINCE THE CARRY FORWARD IS ONLY OF THE 'DEFICIT' AND THER E IS NO TIME LIMIT AS SUCH LIKE WHAT IS PROVIDED IN SECTIONS 70 TO 79 OF THE ACT AND THEREFORE THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. V. COMMISSIONER OF INCOME-TAX (S UPRA) IS NOT APPLICABLE. THE ASSESSEE WAS IN FACT NOT MAKING AN Y FRESH CLAIM. FURTHER IT WAS CONTENDED THAT THIS DECISION WAS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS THE FACTS ARE DISTINGUISHAB LE. IT WAS THE ASSESSING OFFICER WHO INSTRUCTED THE ASSESSEE TO FI LE THE RECTIFICATION APPLICATION SO AS TO SET RIGHT THE MISTAKES IF ANY COMMITTED SO THAT THE CORRECT AMOUNT OF 'DEFICIT' COULD BE CARRIED FORWAR D FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSEE SUBMITTED TH AT THE ASSESSING OFFICER SHOULD HAVE ALLOWED THE ENTIRE UNABSORBED D EPRECIATION TO BE CARRIED FORWARD AMOUNTING TO RS.10 21 81 627/-. IN SUPPORT OF THE VIEW ASSESSEE RELIED ON THE DECISIONS MENTIONED IN PARA 5 OF THE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 13 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 COMMISSIONER OF INCOME-TAX(A)'S ORDER. THE ASSESSE E ALSO OBJECTED THE FINDING OF THE ASSESSING OFFICER THAT DONATION TO ANOTHER CHARITABLE TRUST TO CARRY ON ACTIVITIES OF THAT TRU ST THE OBJECTS OF WHICH ARE IDENTICAL AS THE TRUST MAKING THE DONATION CAN NOT BE CONSIDERED AS APPLICATION OF THE INCOME. THE ASSESSEE RELIED ON INSTRUCTIONS RECEIVED BY THE CBDT NO.1132 DT.5.1.1978 FOR THE PROPOSITION THAT SUCH DONATIONS ARE TO BE CONSIDERED AS APPLICATION OF THE INCOME. THE ASSESSEE ALSO RELIED ON THE FOLLOWING DECISIONS : I) CIT V. SARLADEVI SARABHAI TRUST (172 ITR 698) (G UJ); II) CITV. HINDUSTHAN CHARITY TRUST (139 ITR 913) (C AL); III) CIT V. MOTRISEVA TRUST (242 ITR 20) (MAD); IV) CITV.THANTHI TRUST (239 ITR 502) (SC); V) CITV. SHRI RAM MEMORIAL FOUNDATION (269 ITR 35) (DEL) 10. BEFORE US FOR THE ASSESSMENT YEARS 2002-03 TO 2005-06 THE LEARNED COUNSEL FOR THE ASSESSEE MADE SUBMISSIONS A S UNDER. RELYING UPON THE DECISION OF THE KARNATAKA HIGH COURT IN TH E CASE OF COMMISSIONER OF INCOME-TAX V. SOCIETY OF THE SISTER S OF ST. ANNE (SUPRA) AND THE DECISION OF THE BOMBAY HIGH COURT I N THE CASE OF INSTITUTE OF BANKING (SUPRA) HE SUBMITTED THAT IN THE CASE OF A TRUST DEPRECIATION BEING A NOTIONAL EXPENDITURE IS REQUIR ED TO BE ALLOWED. THIS IS BECAUSE THE ASSESSEE'S ENTIRE INCOME IS EXE MPTED. IN THE CASE OF SOCIETY OF THE SISTERS OF ST. ANNE REFERRING TO SECTION 11(1) THE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 14 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 HON'BLE HIGH COURT OF KARNATAKA HELD THAT THE WORD 'INCOME' IS A MUCH WIDER TERM THAN THE EXPRESSION PROFIT AND GAIN S OF BUSINESS OR PROFESSION. FOR ARRIVING AT THE NET SURPLUS THE DE PRECIATION SHOULD BE UNDERSTOOD AS NECESSARY OUTGOINGS AND THE DEPRECIAT ION IS NOTHING BUT DECREASE IN VALUE OF PROPERTY THROUGH WEAR AND TEAR DETERIORATION OR OBSOLESCENCE AND ALLOWANCE IS MADE FOR THIS PURPOSE . THE ASSESSEE'S COUNSEL MADE REFERENCE TO BOARD CIRCULAR NO.5-P (LX X-6) OF 1968 DT.19.7.1968 AND THE JUDGEMENT OF THE HON'BLE MADRA S HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. RAO BAHAD UR CALAVALA CUNNAN CHETTY CHARITIES (1982) 135 ITR 485 PARTICU LARLY AT PAGE 495 WHEREIN IT HAS BEEN OBSERVED THAT THE INCOME FROM T HE PROPERTIES HELD UNDER TRUST WOULD HAVE TO BE ARRIVED AT A NORMAL CO MMERCIAL MANNER WITH REGARD TO THE PROVISIONS WHICH ARE ATTRACTED B Y SECTION 14. THE SAME PRINCIPLE WAS ALSO FOLLOWED BY THE BANGALORE B ENCH OF THE TRIBUNAL IN THE CASE OF M/S. MEDICAL RELIEF SOCIETY (SUPRA). HE FURTHER SUBMITTED THAT THE DECISION RELIED UPON BY THE REVENUE IN THE CASE OF ESCORTS LTD. AND ANOTHER V. UNION OF INDIA (199 ITR 43) COMES INTO PICTURE ONLY WHEN DEDUCTION IS CLAIMED F OR COMPUTING THE INCOME UNDER THE HEAD 'INCOME FROM BUSINESS OR PROF ESSION'. THERE WAS NO DEDUCTION WITH REGARD TO THE COST OF THE ASS ETS AS WAS CLAIMED BY THE ASSESSEE WHILE COMPUTING THE SURPLUS. THE D EDUCTION WAS ALLOWED BY THE ASSESSING OFFICER BY WAY OF APPLICAT ION OF SURPLUS ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 15 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 WHICH THE ASSESSEE WAS ELIGIBLE U/S.11(1) OF THE AC T. THUS THERE WAS NO DOUBLE DEDUCTION AS CONTEMPLATED IN THE CASE REF ERRED TO. HENCE THE COUNSEL FOR THE ASSESSEE SUBMITTED THE ORDER OF THE FIRST APPELLATE AUTHORITY MUST BE ALLOWED. 11. WITH REGARD TO THE SECOND ISSUE THE LEARNED CO UNSEL SUBMITTED THAT THE STAND OF THE REVENUE THAT THE ASSESSEE DID NOT CLAIM THE CARRY FORWARD IN THE ORIGINAL RETURN AND THE CLAIM WAS MA DE FOR THE FIRST TIME THROUGH APPLICATION U/S.154 OF THE ACT WHICH WAS TI ME BARRED AND THERE IS NO PROVISION UNDER THE INCOME TAX TO ALLOW CARRY FORWARD OF THE LOSS OF THE PRECEDING YEARS ANY EXCESS EXPENDIT URE/APPLICATION OF THE PRECEDING YEARS WERE NOT TO BE SET OFF AGAINST THE SUBSEQUENT YEARS' SURPLUS. THOUGH THE ASSESSEE HAS NOT SPECIFICALLY SOUGHT FOR ANY CARRY FORWARD BENEFIT FOR THE ASSESSMENT YEARS UP TO 200 5-06 THE ASSESSEE FILED THE RETURN OF INCOME WHERE THE SURPLUS WAS DE TERMINED AND THE APPLICATION WAS MADE DURING THE YEARS HAVE BEEN DEC LARED. IN THE EARLIER YEARS THE ASSESSEE HAD NOT SPECIFICALLY SOU GHT FOR ANY CARRY FORWARD BENEFIT. SURPLUS IS BEING DETERMINED FOR T HE PURPOSE OF SECTION 11 AND NOT U/S.28. WHILE PROCESSING THE AS SESSMENT FOR THE ASSESSMENT YEAR 2006-07 THE ASSESSING OFFICER RAISE D THE ISSUE AND IN ORDER TO ENABLE THE ASSESSING OFFICER TO ASCERTA IN THE EXCESS APPLICATION IN THE PRECEDING YEAR THE ASSESSEE FILE D APPLICATION U/S.154 ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 16 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 TO ENABLE THE ASSESSING OFFICER TO QUANTIFY SUCH EX CESS APPLICATION IN THE RELEVANT YEAR. THE ASSESSEE FILED THE APPLICAT ION U/S.154 UP TO ASSESSMENT YEARS 2004-05 IN FACT TO ENABLE THE OFFI CER TO ASCERTAIL THE ACTUAL SURPLUS OF THE APPLICATION WHICH WAS REQUIRE D TO BE SET OFF AGAINST THE SURPLUS AGAINST THE ASSESSMENT YEAR 200 6-07. FOR ASSESSMENT YEARS 2004-05 AND 2005-06 IN THE RETURNS ITSELF THE CLAIM WAS MADE AND THE EXCESS SURPLUS WAS SHOWN. FOR THI S ASSESSMENT YEAR THE ASSESSMENT HAS BEEN COMPLETED ACCORDINGLY ACCEPTING THE RETURN THOUGH IN THE INTIMATION THE ASSESSED INCOM E HAS SHOWN AS NIL. THE ASSESSEE'S COUNSEL WITHOUT PREJUDICE TO THE CLA IM OF THE ASSESSEE SUBMITTED THAT THE EXCESS APPLICATION AS CLAIMED FO R THE EARLIER YEARS UP TO 2004-05 CUMULATIVELY WAS TO BE CONSIDERED FOR SET OFF AGAINST THE SURPLUS FOR THE ASSESSMENT YEAR 2006-07. THE C OUNSEL FOR THE ASSESSEE SUBMITTED SURPLUS FOR THE PURPOSE OF SECTI ON 11 IS REQUIRED TO BE CONSIDERED AFTER ALLOWING APPLICATION TOWARDS OB JECTS OF THE TRUST. IT IS ONLY THE SURPLUS OVER THE EXPENDITURE IS REQU IRED TO BE ASSESSED. UNDISPUTEDLY IN THE INSTANT CASE OF THE ASSESSEE T HE TRUST HAD EXCESS APPLICATION OVER THE INCOME IN THE PAST YEARS WHICH WAS REQUIRED TO BE CONSIDERED AGAINST ITS INCOME IN ORDER TO ASCERTAIN THE SURPLUS LEFT FOR THE PURPOSE OF TAX AFTER ALLOWING THE EXEMPTION U/S .11(1) OF THE ACT. ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 17 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 12. THE COUNSEL FOR THE ASSESSEE SUBMITTED THE HON' BLE BOMBAY HIGH COURT IN INSTITUTE OF BANKING (SUPRA) HAD OBSE RVED THAT SECTION 11 TO 13 ARE SELF CONTAINED CODE FOR THE PURPOSE OF DETERMINATION OF THE INCOME OF THE CHARITABLE TRUST AND THE CHARITAB LE TRUST IS NOT ASSESSABLE UNDER THE HEAD PROFIT AND GAINS OF THE B USINESS U/S.28 FOR WHICH PROVISION THE BENEFIT OF CARRY FORWARD LOSS W AS RELEVANT. THE ASSESSEE IS A CHARITABLE TRUST FOR EDUCATION PURPOS E AND HAS NO PROFIT MOTIVE. SURPLUS IS REQUIRED TO BE DETERMINED FOR T HE PURPOSE OF SECTION 11 AND THE PROVISIONS OF SECTION 28 HAS NO APPLICATION SIGNIFICANTLY THE PROVISIONS OF SECTION 70 OF THE A CT ALSO CANNOT BE BROUGHT IN. THE SURPLUS IS COMPUTED AFTER TAKING I NTO ACCOUNT THE NET OUTGOING OF THE RELEVANT YEAR AND EARLIER YEARS. T HE BOMBAY HIGH COURT TOOK SUPPORT OF THE DECISION OF THE GUJARAT H IGH COURT IN SHRI PLOT SWETAMBER MURTI PUJAK JAIN MANDAL (SUPRA). TH E LEARNED COUNSEL SUBMITTED THAT THE COMMISSIONER OF INCOME-T AX(A) DECIDED THE ISSUE IN ASSESSEE'S FAVOUR FOLLOWING THE ABOVE DECISION OF THE BOMBAY HIGH COURT. THE HON'BLE MADRAS HIGH COURT D ECISION REPORTED IN GOVINDU NAICKER ESTATE (SUPRA) ALSO SUP PORTS THE CASE OF THE ASSESSEE HE SUBMITTED. THE ASSESSEE IS ENJOYIN G EXEMPTION U/S.10(23C)(VI). THUS NO INCOME FOR THE RELEVANT A SSESSMENT YEAR IS LIABLE TO BE TAXED AS EXEMPTION CONTINUES TO BE IN OPERATION FOR THE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 18 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 RELEVANT ASSESSMENT YEARS. HENCE THE LEARNED COUNS EL FOR THE ASSESSEE SUBMITTED THE APPEAL BY THE REVENUE IS TO BE DISMIS SED. 13. CONSIDERING THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT ALL THE APPEALS PREFERRED BY THE REVENUE IS TO BE ALLOWED. THE ASSESSEE IS RELYING ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING (SUPRA) WHEREAS THE REVENUE IS RELYING ON THE DECISION OF THE TRIBUNAL BOMBAY BENCH IN VII ITO V. TRUSTEES OF SATHYA SAI TRUST IN (1990) 33 ITD 320. IN THIS CAS E THE TRIBUNAL HELD THE DEFICIT ARISING AS A RESULT OF EXCESS SPENDING FOR CHARITABLE PURPOSES WILL NOT FORM PART OF THE INCOME AND THE S AME CANNOT BE CARRIED FORWARD. WITH REGARD TO THE POINT WHETHER EXCESS SPENDING WILL FORM OR NOT FORM PART OF THE TOTAL INCOME AND THEREFORE IT COULD BE CARRIED FORWARD OR NOT IS DECIDED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE INSTITUTE OF BANKING (SUPRA) IN A SSESSEE'S FAVOUR. IN THAT CASE HOWEVER IT WAS A REGULAR ASSESSMENT AND NOT 154 ORDER AS IN THE INSTANT CASE OF THE ASSESSEE. THERE WAS NO SPE CIFIC CLAIM AS SUCH BY THE ASSESSEE IN THE INSTANT CASE. THEREFORE TH E FACTS ARE DISTINGUISHABLE. 14. THE REVENUE ALSO RELIES ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX AND ANOTHER V. ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 19 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 DALMIA CEMENTS (BHARAT) LTD. (1995) 216 ITR 79 FO R THE PROPOSITION THAT THERE IS A DIFFERENCE BETWEEN REFUSAL TO ASSES S AND FAILURE TO INTIMATE THE AMOUNT OF LOSS DETERMINED. IF THE ASS ESSING OFFICER REFUSES TO MAKE THE ASSESSMENT ON THE GROUND THAT T HE RETURN FILED IS BEYOND TIME AND INFORMING THE ASSESSEE THAT NO COGN IZANCE COULD BE TAKEN ON SUCH RETURN NO APPEAL LIES AGAINST SUCH O RDER. IN SUCH CASE ASSESSEE CANNOT CLAIM IN ASSESSMENT PROCEEDINGS FOR A SUBSEQUENT YEAR THAT LOSSES OF THE ASSESSMENT YEAR INVOLVED SHOULD BE DETERMINED CARRIED FORWARD AND SET OFF AGAINST THE PROFITS IN SUCH SUBSEQUENT YEARS. THIS DISTINCTION THE ASSESSEE TRIES TO MA KE OUT ON FACTS SO AS TO PROVE THAT THIS DECISION OF THE SUPREME COURT IS NOT APPLICABLE TO THE ASSESSEE SINCE THE ORDERS U/S.154 AROSE BECAUSE OF THE ORDER OF ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07 AND 154 ORDER WAS IN A WAY CLARIFICATION AND NOT A FRESH ORDER. WE ARE AF RAID THIS ARGUMENT OF THE ASSESSEE CANNOT BE ACCEPTED. REQUEST FOR RECTI FICATION WAS MADE BY THE ASSESSEE VIDE APPLICATION DT.29.12.2003 WHIC H WAS MADE BEYOND THE PRESCRIBED TIME OF FOUR YEARS. UNDISPUT EDLY THE STAND OF THE ASSESSEE THAT IT CAN BE DONE AND THE ORDER COUL D BE RECTIFIED IN THE LIGHT OF THE ABOVE FACTS IS A DEBATABLE POINT AND THEREFORE IT IS BEYOND THE SCOPE OF SECTION 154 AS HELD BY THE HON'BLE SU PREME COURT AND RIGHTLY RELIED BY THE ASSESSEE IN THE CASE OF T. S. BALRAM ITO V. VOLKART BROTHERS (82 ITR 50). ON THIS GROUND APPEA L BY THE REVENUE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 20 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 IS TO BE ALLOWED AND WE QUASH THE ORDER OF THE COMM ISSIONER OF INCOME-TAX(A). THE ORDER OF THE ASSESSING OFFICER STANDS. SINCE WE HAVE DECIDED THE PRELIMINARY ISSUE IN FAVOUR OF THE REVENUE THERE IS NO NEED FOR US TO DECIDE THE OTHER POINTS ON MERIT. 15. IN THE RESULT APPEALS BY THE REVENUE FOR ASSES SMENT YEARS 2002- 03 TO 2005-06 ARE ALLOWED. ITA NO.482 TO 484/BANG/2009-M/S. ACADEMY OF GENERAL EDUCATION - ASSESSMENT YEARS 2003-04 TO 2005-06 : 16. SINCE THE FACTS ARE IDENTICAL TO THE APPEAL IN ITA.481/BANG/2009 DECIDED BY US IN THE SUPERCEDING PARAGRAPHS FOLLOWING THE SAME WE ALLOW THESE APPEALS BY THE R EVENUE. ITA NO.486 TO 490/BANG/2009-M/S. DR. T. M. A PAI FO UNDATION- ASSESSMENT YEARS 2001-02 TO 2005-06 : 17. SINCE THE FACTS ARE IDENTICAL TO THE APPEAL IN ITA.481/BANG/2009 DECIDED BY US IN THE SUPERCEDING PARAGRAPHS FOLLOWING THE SAME WE ALLOW THESE APPEALS BY THE R EVENUE. ITA NO.485/BANG/2009-M/S. ACADEMY OF GENERAL EDUCAT ION- ASSESSMENT YEAR 2006-07 : 18. THIS IS AN APPEAL BY THE REVENUE AGAINST THE OR DER OF THE ASSESSING OFFICER U/S.143(3). THE FACTS BRIEFLY FO R THIS YEAR ARE AS UNDER. THE ASSESSEE FILED THE RETURN OF INCOME ON 3 0.10.2006 ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 21 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 DECLARING RECEIPT OF RS.3 84 28 818/-. THE EXCESS OF INCOME OVER EXPENDITURE WAS RS.1 00 20 122/- WAS SHOWN. THE AS SESSEE CLAIMED THE SET OFF OF BROUGHT FORWARD UNABSORBED EXPENSES AGAINST THE SURPLUS. THE RETURN WAS PROCESSED U/S.143(1) AND S UBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSEE'S STA TUS IS TREATED AS AOP TRUST. WHILE PROCESSING THE RETURN THE ASSESSING O FFICER NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.1 00 20 32 2/- TOWARDS SET OFF OF BROUGHT FORWARD UNABSORBED EXPENSES FROM THE ASSESSMENT YEAR 2002-03 ONWARDS THE DETAILS ARE AS UNDER : ASST.YEAR DEFICIT B/F SET OFF DURING THE YEAR NET CARRIED FORWARD 2002-03 9 31 07 223 1 00 20 322 8 30 86 901 2003-04 1 58 31 552 -- 1 58 31 551 2004-05 26 97 868 -- 26 97 868 2005-06 -- -- -- 2006-07 -- -- -- TOTAL 11 16 36 643 1 00 20 322 10 16 16 321 VIDE HIS LETTER DT.14.10.2008 IT WAS MENTIONED THAT FOR THE YEAR UNDER CONSIDERATION ASSESSEE CLAIMED SET OFF OF EXCESS EX PENDITURE INCURRED IN THE EARLIER ASSESSMENT YEARS AGAINST THE SURPLUS OF THIS I.E. 2002-03 OF RS.9 31 07 223/-; 2003-04 OF RS.1 58 31 552/-; A ND 2004-05 OF RS.26 97 868/-. HOWEVER HE FURTHER MENTIONED THAT ON VERIFICATION OF THE RECORDS AND THE RETURNS FILED FOR THE EARLIE R YEARS ASSESSEE HAS ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 22 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 NOT CLAIMED CARRY FORWARD OF EXCESS EXPENDITURE FOR SET OFF AGAINST SUCCEEDING ASSESSMENT YEAR. HENCE IT WAS INFORMED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GOETZE (INDIA) LTD. V. COMMISSIONER OF INCOME-TAX (2006) 284 ITR 323 THE ASSESSING AUTHORITY HAS NO POWER TO ENTERTAIN THE C LAIM MADE OTHERWISE THAN BY WAY OF REVISED RETURN. IT WAS FU RTHER INFORMED THAT THE CLAIM OF SET OFF OF EXPENDITURE WAS ALSO NOT FO UND TO BE CORRECT AND HE INFORMED ACCORDINGLY. FOR THE FACTS MENTION ED ON PAGES 6 AND 7 DEALING WITH THE ASSESSMENT YEARS 2002-03 TO 2005 -06 THE ASSESSING OFFICER HELD IN FACT THERE IS NO EXCESS O F EXPENDITURE INCURRED FOR EDUCATIONAL PURPOSE TO BE CARRIED FORW ARD AGAINST THE INCOME FOR THE ASSESSMENT YEAR 2006-07. FURTHER SU CH EXCESS EXPENDITURE HAVE ALSO NOT BEEN SOUGHT TO BE CARRIED FORWARD FOR SET OFF IN THE SUBSEQUENT ASSESSMENT YEARS. HE FURTHER INFORMED THE ASSESSEE UNDER WHICH PROVISION OF THE ACT THE ASSES SEE IS CLAIMING SET OFF OF EXPENDITURE OF EARLIER ASSESSMENT YEARS. IN RESPONSE TO THE ABOVE LETTER THE ASSESSEE BRIEFLY SUBMITTED IN THE SCHEDULE TO RETURN ANNEXED FOR THE ASSESSMENT YEAR 2002-03 ASSESSEE DI SCLOSED CAPITAL EXPENDITURE AND CONTRIBUTION MADE TO DR. T. M. A. P AI CONVENTION CENTRE AMOUNTING TO RS.15 CRORES. WHILE PASSING TH E ORDER FOR VARIOUS ASSESSMENT YEARS IT HAS NOT BEEN MENTIONED IN ANY OF THE ASSESSMENT ORDERS THAT THE DEFICIT IS TO BE CARRIED FORWARD. NORMALLY ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 23 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 IN THE CASE OF BUSINESS INCOME THE ASSESSING OFFICE R MENTIONS THE DETAILS OF BROUGHT FORWARD AND CARRIED FORWARD BUSI NESS LOSS AND DEPRECIATION SEPARATELY FOR THE REASON WHILE GIVING SET OFF FIRST THE BUSINESS LOSS SHOULD BE DEDUCTED AGAINST THE CURREN T INCOME AND DEPRECIATION CAN BE CARRIED FORWARD AS THERE IS NO LIMIT OF 8 ASSESSMENT YEARS IN THE CASE OF SET OFF OF BUSINESS LOSS. HOWEVER IN THE CASE OF A TRUST THE CARRY FORWARD IS ONLY OF TH E DEFICIT AND THERE IS NO LIMIT AS SUCH LIKE WHAT IS PROVIDED UNDER SECTIO NS 70 TO 79 OF THE ACT. THE NOTION STATED BY THE ASSESSING OFFICER IN HIS ORDER WILL NOT DEPRIVE THE ASSESSEE'S RIGHT OF SET OFF OF THE SURP LUS AGAINST THE BROUGHT FORWARD DEFICIT OF THE PREVIOUS YEARS. HEN CE THE DECISION IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) HAS NO A PPLICABILITY IN THE INSTANT CASE OF THE ASSESSEE. IT WAS FURTHER INFOR MED THAT THE PREDECESSOR OF THE ASSESSING OFFICER HAS ACCEPTED T HE ASSESSEE'S CLAIM WHILE FRAMING THE ASSESSMENT ORDER FOR ASSESSMENT Y EAR 2005-06 AND HE TOO HAS NOT MENTIONED IN THE ASSESSMENT ORDER TH E AMOUNT OF DEFICIT BALANCE TO BE CARRIED FORWARD. IT WAS FURT HER STATED SINCE MAHE IS ALSO EXEMPTED U/S.10(23C)(VI) OF THE ACT T HE 9TH PROVISO TO SECTION 10(23C)(VI) ALLOWS CONTRIBUTION TO OTHER TR UST MADE OUT OF CURRENT YEAR'S INCOME. THE ASSESSEE FURTHER SUBMIT TED THE CBDT'S INSTRUCTION NO.1132 DT.5.1.1978 ALLOWS TO TREAT SU CH DONATIONS FOR THE PURPOSE OF EXEMPTION U/S.11 OF THE ACT. ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 24 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 19. WHILE COMING TO THE ABOVE CONCLUSION HE FURTHER HELD IN SPITE OF SPECIFIC REQUEST ASSESSEE HAS NOT SPECIFIED UNDE R WHICH PROVISION OF THE INCOME TAX ACT 1961 THE SET OFF OF EARLIER YEARS' DEFICIT IS ADMISSIBLE. THE CASE OF MEDICAL RELIEF SOCIETY OF SOUTH KANARA WHEREIN THE DECISION OF THE BOMBAY HIGH COURT IN TH E CASE OF COMMISSIONER OF INCOME-TAX V. INSTITUTE OF BANKING (264 ITR 110) HAS BEEN REFERRED TO HAS BEEN TAKEN UP IN FURTHER APPEAL TO THE HIGH COURT. HENCE HE DID NOT FOLLOW THE DECISION. THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. (SUPRA) TH E ASSESSING AUTHORITY HAS NO POWER TO ENTERTAIN CLAIM MADE OTHE RWISE THAN BY WAY OF REVISED RETURN. THE CLAIM OF THE ASSESSEE TO CA RRY FORWARD OF THE DEFICIT OF THE EARLIER YEARS CANNOT BE ALLOWED. WH ILE COMING TO THE ABOVE CONCLUSION THE ASSESSING OFFICER ALSO REFERRE D TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF DHARMEN DRA TEXTILES PROCESSORS (2008) 306 ITR 277 (SC) PARTICULARLY TO THE PRINCIPLES ENUNCIATED WHICH READ AS UNDER : 'IT IS WELL SETTLED PRINCIPLE OF LAW THAT THE COURT CANNOT READ ANYTHING INTO A STATUTORY PROVISION OR A STIPULATED CONDITION WHICH IS PLAIN AND UNAMBIGUOUS. A STATUTE IS AN E DICT OF THE LEGISLATURE. THE LANGUAGE EMPLOYED IN A STATUTE IS THE DETERMINATIVE FACTOR OF LEGISLATURE INTENTION. WHI LE INTERPRETING A PROVISION THE COURT ONLY INTERPRETS THE LAW AND CANNOT LEGISLATE ON IT. IF A PROVISION OF LAW IS M ISUSED AND SUBJECTED TO THE ABUSE OF PROCESS OF LAW IT IS FOR THE ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 25 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 LEGISLATURE TO AMEND MODIFY OR REPEAT IT IF DEEME D NECESSARY. LEGISLATIVE CASUS OMISSUS CANNOT BE SUPPLIED BY JUD ICIAL INTERPRETATIVE PROCESS. A CASUS OMISSUS OUGHT NOT BE CREATED BY INTERPRETATION SAVE IN SOME CASE OF STRONG NECE SSITY.' THE ASSESSING OFFICER HELD THAT SINCE THE LEGISLATU RE HAS MADE NO OMISSION THE COURT HAS NO RIGHT TO SUPPLY AND FILL THE GAP. WITH THE ABOVE OBSERVATION HE REJECTED THE ASSESSEE'S CLAIM. THE ASSESSEE TOOK UP THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(A). 20. CONSIDERING THE FACT THAT SIMILAR ISSUE WAS AGI TATED BEFORE THE COMMISSIONER OF INCOME-TAX(A) IN THE CASE OF MANIPA L EDUCATION NETWORK FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO. 35/UDP/08- 09 DT.13.3.2009 WHEREIN HE HELD THE ASSESSING OFF ICER WAS NOT JUSTIFIED IN DENYING THE DEPRECIATION CLAIMED AS WE LL AS SET OFF OF EXCESS EXPENDITURE INCURRED DURING THE ASSESSMENT Y EARS. HE DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASS ESSEE IN THE INSTANT CASE AS WELL. WHILE COMING TO THE ABOVE CONCLUSION MAINLY HE NOTED THAT IN ORDER TO AVAIL EXEMPTION U/S.11 A CHARITAB LE TRUST MUST APPLY 85% OF THE INCOME DERIVED PROPERTY HELD BY THE TRUS T WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES IN INDIA. THUS I T WAS NOT ONLY PRUDENT BUT ALSO ESSENTIAL FOR THE PURPOSE OF ARRI VING AT INCOME AVAILABLE FOR APPLICATION TOWARDS OBJECTS OF THE TR UST AND TO DEDUCT DEPRECIATION IN ACCORDANCE WITH THE ORDINARY COMMER CIAL PRINCIPLES. ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 26 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 SO AS TO ARRIVE AT THE AVAILABLE INCOME FOR APPLICA TION AMOUNT OF DEPRECIATION IS TO BE DEDUCTED. HE FURTHER HELD TH E FACTS IN THE DECISION RELIED BY THE ASSESSEE IN THE CASE OF COMM ISSIONER OF INCOME-TAX V. INSTITUTE OF BANKING IN 264 ITR 110 ( BOM) ARE IDENTICAL TO THE FACTS OF THE ASSESSEE'S CASE. IN THAT CASE DEPRECIATION CLAIMED WAS REJECTED BY THE ASSESSING OFFICER FOR T HE REASON THAT THE CAPITAL EXPENDITURE INCURRED DURING THE ACCOUNTING YEAR WAS ALLOWED AS A DEDUCTION. THE HON'BLE HIGH COURT HELD THAT W ILL NOT DEPRIVE THE ASSESSEE THE BENEFIT OF DEPRECIATION. COMING TO TH E DENIAL OF ADJUSTMENT OF EXCESS EXPENDITURE OF EARLIER YEARS HE RELIED MAINLY ON THE FOLLOWING DECISIONS : I) GOVINDU NAICKER ESTATE V. ADIT (1999) 105 TAXMAN 719 (MAD); II) CITV. INSTITUTE OF BANKING (264 ITR 110) (BOM); III) DAWAT INSTITUTE OF DAWOODI BOHRA COMMUNITY V. ITO (22 SOT 359) : THIS WAS A CASE WHEREIN THE ASSESSEE APPLIED AN A MOUNT OF RS.58 09 87 048/- FOR CHARITABLE OR RELIGIOUS PURPO SES OF THE TRUST AGAINST THE TOTAL INCOME OF RS.35 60 82 101/-. THE ASSESSEE CLAIMED ACCUMULATION OR SET APART OF 25% OF THE TOTAL INCOM E AND THEREAFTER CLAIMED CARRY FORWARD OF EXCESS AMOUNT INCURRED FOR APPLICATION OF OBJECTIVES OF THE TRUST OVER AND ABOVE THE REMAININ G INCOME I.E. 75% OF THE TOTAL INCOME FOR SET OFF AGAINST THE INCOME OF THE TRUST IN THE SUCCEEDING YEARS. ASSESSING OFFICER DISALLOWED THE CLAIM. ON FURTHER ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 27 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 APPEAL THE TRIBUNAL ALLOWED THE CLAIM OF THE ASSESS EE AND REMANDED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICE R WITH A DIRECTION TO ALLOW CARRY FORWARD OF EXCESS EXPENDITURE INCURRED BY THE ASSESSEE TO SUBSEQUENT YEARS. 21. THE COMMISSIONER OF INCOME-TAX(A) FURTHER RELIE D ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF COMMISSIONER OF INCOME-TAX V. SHRI PLOT SWETAMBAR M URTI PUJAK JAIN MANDAL (1995) 211 ITR 293. IN THIS CASE ALSO THE H ON'BLE HIGH COURT HELD THAT EXCESS OF EXPENDITURE OF EARLIER YEARS CA N BE ADJUSTED AGAINST THE INCOME OF SUBSEQUENT YEARS. 22. IN THE LIGHT OF THE ABOVE DECISIONS THE COMMISS IONER OF INCOME-TAX(A) HELD THE ASSESSING OFFICER WAS NOT JU STIFIED IN DENYING THE CLAIM OF ALLOWING BROUGHT FORWARD DEFICIT TO TH E ASSESSEE. WHILE COMING TO THE ABOVE CONCLUSION HE FURTHER HELD THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE ASSESSEE IS A TRUST FOR C HARITABLE AND RELIGIOUS PURPOSES BUT REJECTED THE CLAIM OF THE ASSESSEE OF SET OFF FOR THE REASON THAT THERE WAS NO PROVISION IN THE INCOME TAX ACT 1961 TO ALLOW THE CLAIM. WHILE COMING TO THE ABOVE CONCLUSION HE ALS O CONSIDERED THE DECISION OF THE TRIBUNAL BANGALORE BENCH IN THE CA SE OF MEDICAL RELIEF SOCIETY OF SOUTH KANARA IN ITA NOS.1239 TO 1 243/BANG/2007- ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 28 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 08 DT.25.4.2008. THE COMMISSIONER OF INCOME-TAX(A ) HELD THAT THE FACTS IN THE INSTANT CASE IS SIMILAR TO MANIPAL EDU CATION NETWORK WHEREIN THE ASSESSING OFFICER WAS DIRECTED TO ALLOW DEPRECIATION. WHILE GIVING RELIEF TO THE ASSESSEE COMMISSIONER OF INCOME-TAX(A) HAS TAKEN NOTE OF THE STAND OF THE ASSESSING OFFICE R THAT SUBSTANTIAL AMOUNT HAS BEEN CLAIMED AS EXEMPTED U/S.10(23C)(VI) AND THERE ARE NO CLAIMS MADE BY THE ASSESSEE IN THE EARLIER ASSES SMENT YEARS FOR CARRY FORWARD OF EXCESS EXPENDITURE FOR SET OFF AGA INST THE SURPLUS OF THE SUBSEQUENT YEARS. THE ASSESSEE IN THE REPLY NO T ONLY CONTENDED THAT IN THE STATEMENT OF INCOME THE ASSESSEE HAS NO T ONLY CLAIMED SET OFF OF UNABSORBED EXPENSES BUT ALSO SHOWN YEARWISE AMOUNTS OF UNABSORBED EXPENSES TO BE CARRIED FORWARD. IF THE ASSESSING OFFICER HAS NOT SPECIFIED THE AMOUNT THAT WILL NOT DEPRIVE THE ASSESSEE THE BENEFIT OF SET OFF. THE COMMISSIONER OF INCOME-TAX (A) FURTHER NOTED THAT MAHE IS EXEMPTED U/S.12A AS WELL AS U/S.10(23C )(VI). TAKING COGNIZANCE OF THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. TRUSTEES OF THE JADI TRUST (133 ITR 494); COMMISSIONER OF INCOME-TAX V. MATRISEVA TRUST (2000) 242 ITR 20 (MAD); COMMISSIONER OF INCOME-TAX V. AUROBINDO M EMORIAL FUND SOC (2001) 247 ITR 93 (MAD); SARABHAI FOUNDATION V. ITO (1989) 30 ITD 23 (AHD); COMMISSIONER OF INCOME-TAX V. HINDUST AN CHARITY TRUST (139 ITR 913); AND COMMISSIONER OF INCOME-TAX V. SARLADEVI ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 29 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 SARABHAI TRUST (NO.2) 172 ITR 698 (GUJ) THE COMMIS SIONER OF INCOME-TAX(A) ALLOWED THE APPEAL OF THE ASSESSEE. REVENUE IS IN APPEAL BEFORE US. 23. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE FOR THE EARLIER YEARS. 24. AFTER CONSIDERING THE RIVAL SUBMISSIONS RESPEC TFULLY FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN TH E CASE OF INSTITUTE OF BANKING (SUPRA) WE HOLD THAT THE COMMISSIONER O F INCOME-TAX(A) WAS JUSTIFIED IN ALLOWING THE ASSESSEE'S CLAIM OF D EPRECIATION ON NEW ASSETS PUT INTO USE DURING THE ACCOUNTING YEAR EVE N IF THE ENTIRE COST OF THESE ASSETS HAVE BEEN CLAIMED BY THE ASSESSEE A ND ALLOWED AS AN APPLICATION OF THE INCOME FOR CHARITABLE PURPOSES. THIS GROUND OF THE REVENUE IS ALLOWED. 25. COMING TO CARRY FORWARD OF DEFICIT OF EARLIER Y EARS THIS GROUND OF THE REVENUE IS LIABLE TO BE DISMISSED. IN THE O THER CASES FOR THE ASSESSMENT YEARS 2002-03 TO 2005-06 WE ALLOWED THE APPEAL OF THE REVENUE FOR THE REASON THAT THE ORDER WAS PASSED U/ S.154 AND THE ISSUE WAS BEYOND THE SCOPE OF SECTION 154. COMING TO ASS ESSMENT YEAR 2006-07 THIS GROUND BY THE REVENUE IS TO BE DISMIS SED BECAUSE ON ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 30 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 MERIT WE HAVE HELD THAT THOUGH THE POINT IS TO BE D ECIDED IN ASSESSEE'S FAVOUR FOR EARLIER YEARS SINCE IT IS A DEBATABLE P OINT IT CANNOT BE CONSIDERED U/S.154 WHEREAS THIS ORDER BY THE ASSE SSING OFFICER WAS U/S.143(3) THEREFORE THIS GROUND BY THE REVENUE F OR THE YEAR UNDER CONSIDERATION IS LIABLE TO BE DISMISSED. 26. COMING TO THE THIRD ISSUE FOR ASSESSMENT YEAR 2 006-07 THERE IS A SPECIFIC FINDING BY THE COMMISSIONER OF INCOME-TA X(A) VIDE PARA 4.4 WHICH READS AS UNDER : '4.4 REGARDING DONATION RECEIVED AND PROFIT ON SALE OF SHARES DIRECTLY TAKEN TO CORPUS FUND IT IS SEEN TH AT THE SAID DONATIONS WERE COLLECTED WITH SPECIFIC DIRECTI ONS TOWARDS DEVELOPMENT FEES AND PROFITS AND SALE OF SH ARES IS NOTHING BUT REALISAITON OF CAPITAL ASSETS AND THERE FORE THE SAME IS ALSO REQUIRED TO BE ALLOWED AS CAPITAL RECE IPTS.' 27. WE ARE OF THE VIEW THAT THIS GROUND BY THE REVE NUE IS TO BE DISMISSED. ACCORDING TO THE REVENUE COMMISSIONER OF INCOME- TAX(A) ERRED IN NOT CONSIDERING THE PROVISIONS OF S ECTION 11(1)(D) OF THE ACT WHICH EXCLUDES ONLY VOLUNTARY CONTRIBUTIONS MADE WITH A SPECIFIC DIRECTION THAT THE SAME SHOULD FORM PART O F THE CORPUS FUND OF THE TRUST. ACCORDING TO THE REVENUE FURTHER COMMI SSIONER OF INCOME- TAX(A) WENT WRONG IN HOLDING THAT THE DONATIONS ARE CAPITAL RECEIPTS ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 31 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 BUT WITHOUT GIVING A FINDING THAT THESE DONATIONS W ERE RECEIVED WITH A SPECIFIC DIRECTION THAT THEY SHOULD FORM THE CORPUS FUND OF THE TRUST. HOWEVER THIS GROUND BY THE REVENUE IS DISMISSED IN THE LIGHT OF THE ABOVE QUOTED PARA OF THE COMMISSIONER OF INCOME-TAX (A) WHEREIN HE HAD GIVEN THE SPECIFIC FINDING THAT DONATIONS WERE COLLECTED WITH A SPECIFIC DIRECTION TOWARDS DEVELOPMENT FEES AND PR OFITS. THIS GROUND IS DISMISSED. 28. IN THE RESULT APPEAL BY THE REVENUE IS ALLOWED IN PART. ITA NO.491/BANG/2009-M/S. DR. T. M. A PAI FOUNDATIO N- ASSESSMENT YEAR 2006-07 : 29. COMING TO ASSESSMENT YEAR 2006-07 WHICH IS AN A PPEAL BY THE REVENUE THE FIRST GROUND IS WITH REGARD TO DEPRECI ATION. ACCORDING TO THE REVENUE THE COMMISSIONER OF INCOME-TAX(A) WENT WRONG IN ALLOWING THE ASSESSEE'S CLAIM FOR DEPRECIATION ON N EW ASSETS PUT INTO USE DURING THE ACCOUNTING YEAR RELEVANT TO THE ASSE SSMENT YEAR 2006- 07 THOUGH THE ENTIRE COST OF THESE ASSETS HAVE BE EN CLAIMED BY THE ASSESSEE AS APPLICATION OF INCOME FOR CHARITABLE AC TIVITIES. THIS GROUND BY THE REVENUE IS TO BE ALLOWED IN THE LIGHT OF THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF B ANKING (SUPRA). WE HAVE DISCUSSED THE ISSUE IN DETAIL WHILE DEALING WITH APPEAL BY THE REVENUE IN ITA NO.485/BANG/2009 FOR ASSESSMENT YEAR 2006-07. ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 32 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 OUR FINDINGS THEREIN HOLD GOOD FOR THIS APPEAL ALSO . WE ALLOW THIS GROUND BY THE REVENUE. 30. IN RESPECT OF THE SECOND ISSUE RELATING TO CARR Y FORWARD OF DEFICIT WE HAVE ELABORATELY DELIBERATED UPON THIS ISSUE IN PARAGRAPHS 18 AND 19 SUPRA WHILE DEALING WITH APPEAL BY THE RE VENUE IN ITA NO.485/BANG/2009 FOR ASSESSMENT YEAR 2006-07. OUR FINDINGS THEREIN HOLD GOOD FOR THIS APPEAL ALSO. WE DISMISS THE APPEAL BY THE REVENUE. 31. IN THE RESULT APPEAL BY THE REVENUE IS ALLOWED IN PART. ITA NO.480/BANG/2009 - M/S. MANIPAL EDUCATION NETWO RK - ASSESSMENT YEAR 2006-07 : 32. SINCE THE FACTS ARE IDENTICAL TO THE APPEAL IN ITA.491/BANG/2009 IN THE CASE OF DR. T. M. A PAI FO UNDATION FOR THE ASSESSMENT YEAR 2006-07 DECIDED BY US IN THE PA RAGRAPHS 29 AND 30 ABOVE FOLLOWING THE SAME WE ALLOW THESE APPEAL S BY THE REVENUE. CO NOS.28 TO 39/BANG/2009 - BY THE ASSESSEES : 33. SINCE THE GROUNDS RAISED IN THE CROSS OBJECTION S ARE ONLY IN SUPPORT OF THE ORDER OF THE COMMISSIONER OF INCOME- TAX(A) WE DISMISS THE CROSS OBJECTIONS AS INFRUCTUOUS. ITA.480 TO 485/B/09 & CO.28 TO 33/B/09 PAGE - 33 ITA.486 TO 491/B/09 & CO.34 TO 39/B/09 34. IN THE RESULT : ITA NO.480/B/2009 IS ALLOWED IN PART. ITA NOS.481 TO 484/B/2009 ARE ALLOWED. ITA NO.485/B/2009 IS ALLOWED IN PART. ITA NOS.486 TO 490/B/2009 ARE ALLOWED. ITA NO.491 IS ALLOWED IN PART. CO NOS.29 TO 38 ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 16TH DAY OF FEBRU ARY 2010. SD/- SD/- (N. L. KALRA) (K. P. T. THANGAL) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE DATED : 16TH FEBRUARY 2010 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF ITAT NEW DELHI 7. GF ITAT BANGALORE