INCOME TAX ACT, 1961

Section 11

Charitable trust - Exemption under section 11 - Allowability of depreciation on fixed assets -

Assessee-charitable trust claimed depreciation on fixed assets. AO disallowed assessee's claim on the ground that cost of assets had already been granted as application of income at the time of acquisition of asset and allowance of depreciation would amount to double deduction.Held: Income of Charitable 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 Trust. Although Trust might not be carrying on any business and assets in respect whereof depreciation claimed were not business assets. Further, amendment in section 11(6) vide Finance Act No. 2/2014 which became effective from assessment year 2015-16 was not applicable during concerned assessment year 2011-12, which was prior to assessment year 2015-16. Accordingly, denial of depreciation was not justified.

Followed:CIT-III, Pune v. Rajasthan & Gujarati Charitable Foundation Poona (2018) 253 Taxman 165 (SC) : (2018) 402 ITR 441 (SC) : 2017 TaxPub(DT) 5384 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12

INCOME TAX ACT, 1961

Section 11(4A)

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