DEVI KARUMARIAMMAL Vs. JOINT DIRECTOR OF INCOME-TAX

JUDGEMENT

(1.) The assessee has preferred this appeal challenging the order of the Income Tax Appellate Tribunal, Bench 'D', Chennai, dated 17.7.2013, made in I.T.A.No.757/MDS/2013.

(2.) The assessee is the Public Educational Trust registered under Section 12 AA of the Income Tax Act, 1961. As regards the assessment year 2009-2010, the assessee filed its return of income admitting gross receipts of Rs.8,56,05,633/- and NIL income after claiming exemption under Section 11 of the Act. After scrutiny, a notice was issued to them. In the course of the assessment proceedings, the appellant/assessee claimed revised computation claiming application of income, repayment of loan amount, increase in net current assets and increase in investment. Considering the return, the Assessing Officer arrived at the shortfall as Rs.93,75,462/- towards income. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals)-XII. The grievance of the assessee was that the Assessing Officer had not considered the depreciation on fixed assets. The first Appellate Authority pointed out that the claim of the assessee that the application of income based on the earlier years, exceeded by 85% of the income was held to be not correct and thus, the Commissioner upheld the order of the Assessing Officer. On the basis of the facts available, the Commissioner held that there was deficit application of income than the total income of the trust of the respective years.

(3.) As regards the claim of depreciation in computing the application of the income for the objects of the trust, the Commissioner rejected the plea of the assessee. The Commissioner viewed that under Section 11 of the Act, only actual expenditure incurred/spent, was considered as application and no notional expenditure or allowances were permitted to be counted as application of income of the Trust. The Commissioner also referred to the decisions reported in 199 ITR 43 (ESCORTS LTD. V. UNION OF INDIA) and 135 ITR 485 (CIT V. RAO BAHADUR CUNNAN CALAVALA CHARITIES) and held that when capital expenditure is allowed in its entirety as deduction, any further allowance under any other section would amount to double deduction and hence not permissible. In the light of the above, the Commissioner dismissed the appeal filed by the assessee.