The Commissioner Of Income Tax,Coimbatore v. M/S.coimbatore Welfare Association,Shri Nehru Vidyalaya Campus,Bhagwan Mahaveer Building,Robertson Road,Coimbatore – 641 002

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE: 05.07.2021 CORAM: THE HON'BLE MR. JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE R.HEMALATHA T.C.A.No.423 of 2014 The Commissioner of Income Tax,Coimbatore.... Appellant Vs M/s.Coimbatore Welfare Association,Shri Nehru Vidyalaya Campus,Bhagwan Mahaveer Building,Robertson Road,Coimbatore – 641 002.... Respondent Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Madras, "C" Bench, dated 20.11.2013 in I.T.A.No.1756/Mds/2013for the Assessment Year 2010-11. As against the order dated:28/06/2013 by the office of theCommissioner of Income Tax (Appeals)-I, Coimbatore inP.A.No./G.I.R.No.:AAATC1760F Assessment year 2010-11 and asagainst the order dated:31/01/2013 by the office of theAdditional Commissioner of Income Tax – Range-I, Coimbatore inPAN No.:AAATC1760F Assessment year 2010-11. JUDGMENT (Judgment was delivered by M.DURAISWAMY, J.) Challenging the order passed in I.TA.No1756/Mds/2013 inrespect of the Assessment Year 2010-11 on the file of the IncomeTax Appellate Tribunal, Chennai, "C" Bench, the Revenue hasfiled the above appeal. https://hcservices.ecourts.gov.in/hcservices/ under Section 12A of the Income Tax Act. The assessee filed itsreturn of income for the Assessment Year 2010-11 on 18.01.2011,claiming Rs.2,10,46,625/- as depreciation on assets. TheAssessing Officer disallowed the claim of depreciation on theground that the entire cost of assets has already been claimedas application of income towards objects of the Trust and theclaim of the depreciation on the cost of the very same assetwill result in double deduction. The Assessing Officer relyingon the decision of the Apex Court in the case of Commissioner ofIncome Tax Vs. Lissie Medical Institutions (348 ITR 344),disallowed the claim of depreciation made by the assessee,amounting to Rs.2,10,46,625/-. Aggrieved over the order passedby the Assessing Officer, the assessee preferred an appealbefore the Commissioner of Income Tax (Appeals), who allowed theappeal, directing the Assessing Officer to allow the claim ofdepreciation. The Commissioner of Income Tax (Appeals) alsoobserved that it is not only the accounting principle, but eventhe statute and judicial interpretation of the provisionsprovided that in arriving at the amount of income available forapplication under Section 11, depreciation should be deducted.Aggrieved by the order of the Commissioner of Income Tax(Appeals), the Revenue filed an appeal before the Income TaxAppellate Tribunal and the Tribunal dismissed the appeal.Challenging the order passed by the Income Tax AppellateTribunal, the Revenue has filed the above appeal. 3.The above appeal was admitted on the following substantialquestion of law:“1)Whether in law and in the facts andcircumstances of the case, the Income TaxAppellate Tribunal is right in holding thatdepreciation is allowable as application ofincome on charitable objects? 2)Whether on facts and in the circumstancesof the case, the Income Tax Appellate Tribunalwas right in holding that the assessee isentitled to claim depreciation on the assets inthe form of application of income, even thoughcost of purchase of asset was treated asapplication of income under Section 11?3)Whether in law and in the facts andcircumstances of the case, the Tribunal is rightin holding that allowing the depreciation claimof the assessee would not result in doublededuction, though the entire cost of thedepreciable assets have already been allowed asapplication of income towards objects of theTrust?” 2)Whether on facts and in the circumstancesof the case, the Income Tax Appellate Tribunalwas right in holding that the assessee isentitled to claim depreciation on the assets inthe form of application of income, even thoughcost of purchase of asset was treated asapplication of income under Section 11?3)Whether in law and in the facts andcircumstances of the case, the Tribunal is rightin holding that allowing the depreciation claimof the assessee would not result in doublededuction, though the entire cost of thedepreciable assets have already been allowed asapplication of income towards objects of theTrust?” 4.When the appeal is taken up for hearing,Mr.J.Narayanasamy, learned senior standing counsel appearing forthe appellant–Revenue fairly submitted the substantial questionsof law that are raised in the above appeal were already decidedby the Division Bench of this Court in the common judgment dated26.02.2021 in T.C.A.Nos.343 to 345 & 347 of 2014 [Commissionerof Income Tax, Trichy Vs. M/s.National College Council,Teppakulam, Tiruchirapalli – 620 002] wherein the Division Benchheld as follows: “... 4.When the appeals were taken up for hearing,Mr.J.Narayanasamy, learned Senior Standing Counselappearing for the appellant – Revenue in all theappeals, fairly submitted that the substantial questionof law, which has been framed in these appeals, havebeen answered against the Revenue by the Hon'bleSupreme Court in CIT Vs. Rajasthan and GujaratiCharitable Foundation reported in [2018] 402 ITR 441(SC). Further, the learned Senior Standing Counselsubmitted that following the decision of the Hon'bleSupreme Court, the Hon'ble Division Bench of thisCourt, by judgment dated 26.08.2019, made inT.C.A.Nos.680 & 681 of 2011 [Commissioner of Income Tax– I, Tiruchirapalli Vs. M/s.National College Council,P.B.No.369,ChatramBusStand,Teppakulam,Tiruchirapalli – 620 002] dismissed the appeals andanswered the substantial questions of law against theRevenue. The appeals in T.C.A.Nos.680 & 681 of 2011relates to the very same assessee. Hence, followingthe judgment of the Hon'ble Supreme Court reported in[2018] 402 ITR 441 (SC) and the judgment of theHon'ble Division Bench of this Court made inT.C.A.Nos.680 & 681 of 2011, the substantial questionof law is answered against the Revenue and the appealsare dismissed. No costs.” 5.In view of the fair submission made by the learned SeniorStanding Counsel, following the judgment dated 26.02.2021 madein T.C.A.Nos.343 to 345 & 347 of 2014 and T.C.A.Nos.680 & 681 of2011, the questions of law are answered against the revenue andthe Tax Case Appeal is dismissed. No costs. //True Copy// va Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai, "C" Bench Chennai, "C" Bench 2.The Commissioner of Income Tax (Appeals)-I, Coimbatore. Coimbatore. 3.The Additional Commissioner of Income Tax – Range-I, Coimbatore. Coimbatore. +1cc to M/s.S.Sridhar, Advocate, S.R.No.31291 SSN(CO)RVM(23/07/2021) T.C.A.No.423 of 2014