The Tax Publishers2019 TaxPub(DT) 4927 (Karn-HC) : (2019) 415 ITR 0361

INCOME TAX ACT, 1961

Section 32(1) Section 11

Where in respect of acquisition of fixed assets full expenditure had been allowed in the year of acquisition of the assets, the income of the trust was 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.

Depreciation - Allowability - Entire cost of capital asset(s) already allowed as application of income by a trust -

The question which requires consideration was whether depreciation was allowable on the assets, the cost of which had been fully allowed as application of income under section 11.Held: The income of a charitable trust derived from building, plant and machinery and furniture was liable to be computed in a normal commercial manner although the trust may not be carrying on any business and the assets in respect whereof depreciation was claimed may not be business assets. As full expenditure had been allowed in the year of acquisition of the assets. 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.

FollowedCIT v. Rajasthan and Gujarati Charitable Foundation (2018) 402 ITR 441(SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 11(1)(a)

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