- (1.) The appeal is directed against a judgment and order dated June 19, 2013, by which the learned Tribunal held that "The Hon'ble Jurisdictional High Court of Calcutta as in the case of Bhorukha Public Welfare Trust categorically held that the depreciation claimed in the accounts by the assessee was an outgoing for the purpose of determination of income in terms of section 11(1) of the Act. When the learned Commissioner of Income-tax (Appeals) directed the Assessing Officer to amend the assessment in the light of the registration granted to it under section 12A of the Act it is an automatic direction that such deductions of depreciation is available to the assessee must be given. The non-granting of the depreciation is a mistake apparent from record. In the circumstances, respectfully following the decision of the jurisdictional High Court in the case of Bhorukha Public Welfare Trust referred tothe Assessing Officer is directed to grant the assessee the benefit of depreciation in respect of the investment in the fixed assets". Aggrieved by the order of the learned Tribunal, the Revenue has come up in appeal. The following questions of law were suggested by the Revenue: "(i) Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in law in allowing depreciation under section 32 of the Income-tax Act 1961, to the assessee being a charitable organization and whose income does not include income from business and profession without considering the fact that depreciation as a deduction is allowable against income from business and profession? (ii) Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in law in allowing depreciation on assets without considering the facts that the cost of which has already been treated as application of income for charitable purpose and hence allowing depreciation on such investment would effectively be allowing double deduction from income?"
(2.) Mr. Bhowmick, learned advocate appearing for the appellant, submitted that the learned Tribunal was wrong in allowing the deduction on account of depreciation on the basis of the judgment in the case of CIT v. Bhoruka Public Welfare Trust, 1999 240 ITR 513(Cal.). He drew our attention to the following two paragraphs from the judgment in the case of Bhoruka Public Welfare Trust (page 518): "It is true that the view has been taken by various High Courts including this court in the cases referred to above that in the case of a charitable trust income should be computed and arrived at in the commercial manner but nowhere in the Act it prohibits to calculate or compute the income as per the provisions of the Act. Section 11(1) refers to income and not total income defined in section 2(45) but income, itself has been defined in the Act in section 2(24) why the meaning of income given in section 2(24) should not be taken for income referred in section 11(1) of the Act. Therefore the decision referred to also requires reconsideration. But in the case in hand the assessment year involved is 1983-84, even if we differ from the view taken by this court it will take another five years to conclude. The tax effect is only Rs. 7,000. Therefore, no purpose will be served to differ on this issue with the view taken by this court in CIT v. Jayashree Charity Trust, 1986 159 ITR 280(Cal.) and we leave the issue open to consider this issue in the appropriate case in future."
(3.) He contended that the Division Bench in that case expressed reservations and the claim for depreciation was allowed only because the amount involved was a meagre sum of Rs. 7,000. He contended that on the basis of the said judgment, the Tribunal was not justified in allowing the deduction on account of depreciation which really amounts to double deduction because the assessee has already got 100 per cent deduction for the acquisition of the property in question. Allowing deduction on account of depreciation would, therefore, mean a double deduction. He in support of his submission relied on the judgment in the case Escorts Ltd. v. Union of India, 1993 199 ITR 43(SC). He, therefore, contended that both the questions formulated and quoted above should be answered in favour of the Revenue.;