- (1.) Cm No.14932 CII of 2010 in ITA No.134 of 2010 is allowed. The amended questions of law are taken on record.
(2.) This order shall dispose of ITA Nos.132 and 134 of 2010 as according to the learned counsel for the appellant-revenue, the issues involved in both the appeals are similar. The facts are being extracted from ITA No.134 of 2010.
(3.) Ita No.134 of 2010 has been preferred by the appellantrevenue under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 28.5.2009, Annexure A.3 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (in short, "the Tribunal") in ITA No.471/Chd/2009, for the assessment year 2006-07. The amended substantial questions of law claimed read as under:- "(i) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is justified in allowing depreciation on capital assets, when capital expenditure relating to acquisition of such assets had already been allowed as "application of income" for the purpose of allowing exemption under section 11 of the Income Tax Act, 1961 and as such further allowing of depreciation on these capital assets will amount to double deduction for the same expenditure (ii) Whether allowing of depreciation on the capital assets by the Income Tax Appellate Tribunal is justified in the light of the Hon'ble Apex Court decision in the case of Escorts India Limited, 1993 199 ITR 43 wherein it has been held that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure (iii) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is justified in deleting the addition, made on account of unexplained payment to Haryana State Agricultural Marketing Board (in short HSAMB) for capital works, on the grounds that the assessee Market Committee was required to pay 30% of its income to the Board, whereas the addition had not been made on the issue of admissibility of expenditure but for the reasons that the assessee had failed to prove that the amount was actually spent (iv) Whether on the facts and in the circumstances of the case, the order of the Income Tax Appellate Tribunal is perverse in as much as it has deleted the addition, made on account of interest accrued on advance made by the assessee to the Haryana State Electricity Board by accepting the contention of the assessee that it was maintaining cash system of accounting and no interest income was received during the year, ignoring the fact that as it is clear from the audit report and final account, the assessee had followed mixed system of accounting and not cash system (v) Whether the order of the Income Tax Appellate Tribunal is perverse in deleting the addition, made on account of interest income accrued on advance made to Haryana State Electricity Board, relying on the communication dated 20.1.2003 of the Haryana Government that principal amount of FDRs of Market Committees with HSEB be returned to the concerned Market Committees, but ignoring the remaining part of the communication which says that the matter regarding interest on these deposits will be considered after repayment of principal, which means that right of interest on the advance/deposit made by the assessee with HSEB did not stand waived and as such the same had accrued to the assessee during the year (vi) Whether on the facts and in the circumstances of the case, the order of the Income Tax Appellate Tribunal is perverse as while deleting the addition, made on account of interest accrued on deposits with Market Committee, Pundri, ignoring the fact brought on record by the AO that as per standard agreement between the Market Committees, interest was payable on advances made by the Market Committees to one another ;