Gujarat High Court
Principal Commisisoner Of Income Tax vs Sigma Institute Of Technology And ... on 12 February, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
O/TAXAP/54/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 54 of 2018
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PRINCIPAL COMMISISONER OF INCOME TAX, CENTRAL,
SURAT....Appellant(s)
Versus
SIGMA INSTITUTE OF TECHNOLOGY AND ENGINEERING....Opponent(s)
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Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 12/02/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. The Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 10.10.2016 raising following question for our consideration:
"Whether the Appellate Tribunal is justified in allowing claim of depreciation of Rs.4,35,86,312/ even though the cost of acquisition of these capital assets has already been claimed as on expense towards the objects of the trust in the income and expenditure statement ?"
2. Respondent assessee is a Trust claiming exemption from certain income in terms of section 11 of the Income Tax Act, 1961 ('the Act' for short). Such Page 1 of 3 HC-NIC Page 1 of 3 Created On Mon Feb 12 23:03:41 IST 2018 O/TAXAP/54/2018 ORDER exempt income, as in the case on hand, is applied for acquisition of depreciable assets, the assessee claims depreciation on such assets under section 32 of the Act. The Revenue contends that this would amount to double deduction.
3. The issue has been settled by the Supreme Court in case of Commissioner of Income TaxIII, Pune v. Rajasthan & Gujarati Charitable Foundation Poona reported in [2018] 89 taxmann.com 127 (SC) in which, the Supreme Court confirmed the decision of Bombay High Court in case of CIT v. Institute of Banking Personnel Selection reported in [2003] 131 Taxmann 386 (Bom.) and several other High Courts which had taken such a view. The Supreme Court after referring to the judgment of the Bombay High Court in case of Institute of Banking Personnel Selection (supra), observed as under:
"2. After hearing learned counsel for the parties, we are of the opinion that the aforesaid view taken by the Bombay High Court correctly states that principles of law and there is no need to interfere with the same.
3. It may be mentioned that most of the High Courts have taken the aforesaid view with only exception thereto by the High Court of Kerala which has taken a contrary view in 'Lissie Medical Institutions v. CIT [2012] 24 Page 2 of 3 HC-NIC Page 2 of 3 Created On Mon Feb 12 23:03:41 IST 2018 O/TAXAP/54/2018 ORDER taxmann.com 9/209 Taxmann 19 (Mag.)/348 ITR 344 (Ker.)'.
4. It may also be mentioned at this stage that the legislature, realising that there was no specific provision in this behalf in the the Income Tax Act, has made amendment in Section 11(6) of the Act vide Finance Act No.2/2014 which became effective from the Assessment Year 20152016. The Delhi High Court has taken the view and rightly so, that the said amendment is prospective in nature."
4. In the result, Tax Appeal is dismissed.
(AKIL KURESHI, J.) (B.N. KARIA, J.) ANKIT Page 3 of 3 HC-NIC Page 3 of 3 Created On Mon Feb 12 23:03:41 IST 2018