CIT Vs. DESH BHAGAT MEMORIAL EDUCATION TRUST

JUDGEMENT

(1.) This order will dispose of I.T.A. Nos. 346 of 2008, I.T.A. No. 318 of 2009 and I.T.A. No. 155 of 2010, as common question of law is involved.

(2.) I.T.A. No. 346 has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, "the Act") against the order dated 28-9-2007 in I.T.A. No. 140/CHD/2007 passed by the Income Tax Appellate Tribunal, Chandigarh, proposing to raise following substantial question of law:

(3.) The Assessee is a society registered under Section 12-AA of the Act. The Assessee claimed depreciation on the capital assets which was not allowed by the assessing officer on the ground that income of the Assessee being exempt, allowing the claim of depreciation will amount to giving of double benefit. Reliance was placed on judgment of the Honble Supreme Court in Escorts Ltd. v. Union of India, 1993 199 ITR 43. The appeal of the Assessee was allowed by the Commissioner (Appeals), which order has been affirmed by the Tribunal. The Tribunal held that even if income of the Assessee was exempt, claim for depreciation had to be allowed on business principles for determination of extent of application of income of the Assessee to comply with the statutory requirements. It was observed: