JUDGMENT : BHARGAV D. KARIA, J. 1. By this appeal under section 260A of the Income Tax Act,1961 [for short ‘the Act’]. The appellant-Revenue has proposed the following substantial questions of law arising out of the Judgement and Order dated 29.01.2015 passed by the Income Tax Appellate Tribunal, Rajkot Bench [for short ‘the Tribunal’] in ITA 1216/AHD/2011 for Assessment Year 2008-09: “A. Whether the Appellate Tribunal has substantially erred in ignoring the stand of the CIT (A) that allowance of depreciation on the assets, the cost of which has already been allowed as a deduction on account of application of income, would amount to double deduction in view of the decision of the Hon’ble Supreme Court in the case of Escorts Ltd reported in 199 ITR 43? B. Whether the Appellate Tribunal has substantially erred in directing to allow the depreciation claimed by the assessee?” 2. Brief facts of the case are that the respondent-assessee filed return of income on 26.09.2008 declaring total income at Rs. Nil. The income was processed under section 143(1) of the Act on 31.03.2010. Thereafter, notice under section 143(2) of the Act was issued followed by notice under section 142(1). Requisite details were provided by the respondent-assessee stating that the respondent-assesee Trust was engaged in field of education and was registered under section 12A(a) of the Act on 17.10.2003. It was also pointed out that income of the assessee was exempted under section 10(23C)(iv) as per the order dated 29.05.2008 passed by the CCIT-IV, Ahmedabad. 3. The Assessing Officer passed the assessment order dated 31.12.2010 under section 143(3) of the Act by making disallowance on depreciation of Rs. 6,47,32,014/- on the ground that depreciation claimed by the assesse would apparently be double deduction as the investment in assets made by the assessee Trust is allowed as deduction as application of funds. 4. The Assessing Officer relied upon the decision of the Hon’ble Supreme Court in case of Escorts Limited vs. Union of India reported in 199 ITR 43. 5. Being aggrieved by the assessment order dated 31.12.2010, the respondent-assessee preferred appeal before the CIT (A), who dismissed the same by order dated 16.03.2011 brushing aside the submissions made on behalf of the respondent-assessee. 6. 5. Being aggrieved by the assessment order dated 31.12.2010, the respondent-assessee preferred appeal before the CIT (A), who dismissed the same by order dated 16.03.2011 brushing aside the submissions made on behalf of the respondent-assessee. 6. The assessee therefore, preferred an appeal before the Tribunal contending that reliance placed by the Assessing Officer on the decision of the Hon’ble Apex Court in case of Escorts Limited (supra) is not applicable to the facts of the case as Escorts Limited is not a Charitable Trust. Reliance was also placed on the decision of this Court in Tax Appeal Nos. 933 to 936 of 2010 in case of Director of Income Tax (Exemption) vs. Ahmedabad South Indian Association Charitable Trust. Reliance was also placed on the decision of this Court in case of Commissioner of Income Tax vs. Sheth Manilal Ranchhoddas Vishram Bhavan Trust reported in (1992) 198 ITR 598 wherein, decision of Karnataka and Madhya Pradesh High Courts in cases of CIT vs. Society of the Sisters of St.Anne (1984) 146 ITR 28 (Kar) and CIT vs. Raipur Pallottine Society reported in (1989) 180 ITR 579 (MP) and held the issue in favour of the assessee by observing as under: “Whether depreciation has to be allowed as a necessary deduction for computing the income of a charitable institution was the question which came up before the Karnataka High Court in CIT vs. Society of the Sisters of St. Anne (1984) 146 ITR 28 . Noticing of the difference between the word “income” and the expression “total income” and the necessity for providing depreciation in order to maintain correct accounts, the High Court held that the amount of Court held that the amount of depreciation debited to the accounts of the charitable institution has to be deducted to arrive at the income available for application to charitable and religious purposes. Same view has been taken by the Madhya Pradesh High Court in CIT v Raspur Pallotime Society (1989) 120 TR 579. In CIT v. Rao Bahadur Calavela cunnan Chetty Chanties (1982) 135 TTR 485, the Madras High Court was required to consider whether, for the purpose of computing accumulation in excess of 25 per cent as laid down in section 11(1) (a) of the Act, “income” has to be computed under the various heads enumerated in the income-tax Act. In CIT v. Rao Bahadur Calavela cunnan Chetty Chanties (1982) 135 TTR 485, the Madras High Court was required to consider whether, for the purpose of computing accumulation in excess of 25 per cent as laid down in section 11(1) (a) of the Act, “income” has to be computed under the various heads enumerated in the income-tax Act. It held that the income from the properties held under trust would have to be arrived at in the normal commercial manner without classification under the various heads set out in section 14. It held that the expression “income” has to be understood in the popular or general sense and not in the sense in which the income is arrived at for the purpose of assessment to tax by application of some artificial provisions either giving or denying, deduction. It observed that the computation under the different categories or heads arises only for the purposes of ascertaining the total income for the purposes of charge. Those provisions cannot be introduced to find out what the income derived from the property held under trust to be excluded from the total income is, for the purpose of the exemptions under Chapter III. “We are in respectful agreement with the view taken by the Karnataka, Madhya Pradesh and Madras High Courts. We, therefore, answer both the questions referred to us in the affirmative and against the Revenue. No order as to costs.” 7. The Tribunal following the aforesaid decision of this Court in case of Ahmedabad South Indian Association Charitable Trust decided the issue in favour of the respondent-assesse by allowing the depreciation of Rs. 6,47,32,014/-. 8. Learned advocate for the respondent Mr. B.S.Soparkar submitted that the issue now is squarely covered by the decision of the Hon’ble Apex Court in case of Commissioner of Income Tax III, Pune vs. Rajasthan & Gujarati Charitable Foundation Poona reported in [2018] 89 taxmann.com 127 (SC) in favour of the assessee as similar questions, which are raised in this appeal, are answered by the Apex Court. 9. Learned advocate for the appellant Ms. Maithili Mehta could not controvert the aforesaid submissions made by learned advocate Mr. B.S.Soparkar. 10. 9. Learned advocate for the appellant Ms. Maithili Mehta could not controvert the aforesaid submissions made by learned advocate Mr. B.S.Soparkar. 10. The Hon’ble Apex Court in case of Rajasthani & Gujarat Charitable Foundation (supra) while dealing with the issue raised before it regarding allowance of depreciation in the case of Charitable Trust under section 32 of the Act has held as under: “1. These are the petitions and appeals filed by the Income Tax Department against the orders passed by various High Courts granting benefit of depreciation on the assets acquired by the respondents-assessees. It is a matter of record that all the assessees are charitable institutions registered under Section 12A of the Income Tax Act (hereinafter referred to as 'Act'). For this reason, in the previous year to the year with which we are concerned and in which year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore,the grant of depreciation would amount to giving double benefit to the assessee. Though it appears that in most of these cases, the CIT (Appeals) had affirmed the view, but the ITAT reversed the same and the High Courts have accepted the decision of the ITAT thereby dismissing the appeals of the Income Tax Department. From the judgments of the High Courts, it can be discerned that the High Courts have primarily followed the judgment of the Bombay High Court in 'Commissioner of Income Tax v. Institute of Banking Personnel Selection (IBPS)' [(2003) 131 Taxman 386 (Bombay)]. In the said judgment, the contention of the Department predicated on double benefit was turned down in the following manner: 3. As stated above, the first question which requires consideration by this Court is: whether depreciation was allowable on the assets, the cost of which has been fully allowed as application of income under section 11 in the past years? In the case of CIT v. Munisuvrat Jain 1994 Tax Law Reporter, 1084 the facts were as follows. As stated above, the first question which requires consideration by this Court is: whether depreciation was allowable on the assets, the cost of which has been fully allowed as application of income under section 11 in the past years? In the case of CIT v. Munisuvrat Jain 1994 Tax Law Reporter, 1084 the facts were as follows. The assessee was a Charitable Trust. It was registered as a Public Charitable Trust. It was also registered with the Commissioner of Income Tax, Pune. The assessee derived income from the temple property which was a Trust property. During the course of assessment proceedings for assessment years 1977-78, 1978-79 and 1979-80, the assessee claimed depreciation on the value of the building @2½% and they also claimed depreciation on furniture @ 5%. The question which arose before the Court for determination was : whether depreciation could be denied to the assessee, as expenditure on acquisition of the assets had been treated as application of income in the year of acquisition? It was held by the Bombay High Court that section 11 of the Income Tax Act makes provision in respect of computation of income of the Trust from the property held for charitable or religious purposes and it also provides for application and accumulation of income. On the other hand, section 28 of the Income Tax Act deals with chargeability of income from profits and gains of business and section 29 provides that income from profits and gains of business shall be computed in accordance with section 30 to section 43C. That, section 32(1) of the Act provides for depreciation in respect of building, plant and machinery owned by the assessee and used for business purposes. It further provides for deduction subject to section 34. In that matter also, a similar argument, as in the present case, was advanced on behalf of the revenue, namely, that depreciation can be allowed as deduction only under section 32 of the Income Tax Act and not under general principles. The Court rejected this argument. It further provides for deduction subject to section 34. In that matter also, a similar argument, as in the present case, was advanced on behalf of the revenue, namely, that depreciation can be allowed as deduction only under section 32 of the Income Tax Act and not under general principles. The Court rejected this argument. It was held that normal depreciation can be considered as a legitimate deduction in computing the real income of the assessee on general principles or under section 11(1) (a) of the Income Tax Act The Court rejected the argument on behalf of the revenue that section 32 of the Income Tax Act was the only section granting benefit of deduction on account of depreciation. It was held that income of a Charitable Trust derived form building, plant and machinery and furniture was liable to be computed in normal commercial manner although the Trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets. In all such cases, section 32 of the Income Tax Act providing for depreciation for computation of income derived from business or profession is not applicable. However, the income of the Trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the Trust. In view of the aforesatated judgment of the Bombay High Curt, we answer question No. 1 in the affirmative i.e., in favour of the assessee and against the Department. 4. Question No. 2 herein is identical to the question which was raised before the Bombay High Court in the case of Director of Income-tax (Exemption) v. Framjee Cawasjee Institute [1993] 109 CTR 463. In that case, the facts were as follows: The assessee was the Trust. It derived its income from depreciable assets. The assessee took into account depreciation on those assets in computing the income of the Trust. The ITO held that depreciation could not be taken into account because, full capital expenditure had been allowed in the year of acquisition of the assets. The assessee went in appeal before the Assistant Appellate Commissioner. The Appeal was rejected. The assessee took into account depreciation on those assets in computing the income of the Trust. The ITO held that depreciation could not be taken into account because, full capital expenditure had been allowed in the year of acquisition of the assets. The assessee went in appeal before the Assistant Appellate Commissioner. The Appeal was rejected. The Tribunal, however, took the view that when the ITO stated that full expenditure had been allowed in the year of acquisition of the assets, what he really meant was that the amount spent on acquiring those assets had been treated as 'application of income' of the Trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing income from those assets in subsequent years, depreciation in respect of those assets cannot be taken into account. This view of the Tribunal has been confirmed by the Bombay High Court in the above judgment. Hence, Question No. 2 is covered by the decision of the Bombay High Court in the above Judgment. Consequently, Question No. 2 is answered in the Affirmative i.e., in favour of the assessee and against the Department.” 2. After hearing learned counsel for the parties, we are of the opinion that the aforesaid view taken by the Bombay High Court correctly states the principles of law and there is no need to interfere with the same. 3. It may be mentioned that most of the High Courts have taken the aforesaid view with only exception thereto by the High Court of Kerala which has taken a contrary view in 'Lissie Medical Institutions v. Commissioner of Income Tax [2012] 24 taxmann.com 9/209 Taxman 19 (mag.)/348 ITR 344. 11. Learned advocate Ms. Maithili Mehta further submitted that by virtue of The Finance (No.2) Act,2014, sub-section (6) in section 11 of the Act has been inserted w.e.f. 01.04.2015 and it was submitted that however, the Assessment Year in this appeal is 2008-09. Such sub-section (6) of section 11 of the Act which prohibits the claim of depreciation if the same investment is considered as an application of income of the charitable trust would not be applicable. 12. Such sub-section (6) of section 11 of the Act which prohibits the claim of depreciation if the same investment is considered as an application of income of the charitable trust would not be applicable. 12. Having considered the above submissions and in view of the decision of the Hon’ble Apex Court, we are of the opinion that the questions proposed in this appeal are squarely answered in favour of the assessee and against the Revenue and accordingly, the appeal is dismissed. No order as to costs.