COMMISSIONER OF INCOME TAX Vs. CHITRA THIRUNAL COLLEGE

JUDGEMENT

(1.) The connected appeals filed by the Revenue are against the common orders of the Income Tax Appellate Tribunal declaring eligibility mainly for the benefit of depreciation for the respondent-assessee, a charitable institution, and granting exemption to the assessee under section 12 of the Income Tax Act.

(2.) We have heard the Standing counsel appearing for the appellant and have gone through the impugned orders of the Tribunal and that of the lower authorities.

(3.) The respondent is a Trust formed by the Government of Kerala in coordination with the KSRTC, a Government of Kerala undertaking (functioning under Government control). Since the respondent Trust is engaged in conducting Engineering college which claimed exemption under section 11 of the Act and the Trust was granted the benefit by issuing registration in it's favour under section 12 of the I.T.Act, in the returns filed for the assessment years 2001-2002 and 2003-2004, respondent-assessee claimed depreciation on buildings, furniture etc. However, the assessing officer rejected the claim holding that since the income received by the assessee is exempt under section 11 of the Act, the assessee is not entitled to get depreciation. Besides denying depreciation, the assessing officer made an addition of Rs.84,96,000/- towards fees due from KSRTC. For the assessment year 2003-2004, the additional issue raised was with regard to carry forward of income, which according to the Assessing Officer, was in excess to the limit prescribed under section 11(2)(a) of the Act. However, in first appeal, the CIT(Appeals) allowed the appeals on all the grounds raised and the Tribunal on second appeals filed by the Revenue, confirmed the same against which these appeals are filed.