The Tax Publishers2019 TaxPub(DT) 0815 (Bang-Trib)

INCOME TAX ACT, 1961

Section 32

As the amendment in section 11(6) became effective from assessment year 2015-16, the judgment of apex Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation (2018) 402 ITR 441 (SC): 2017 TaxPub(DT) 5384 (SC) was squarely applicable to the instant case, accordingly the assessee would be entitled to depreciation under section 32 on assets whose cost was allowed as application of income towards charitable purposes.

Depreciation - Allowability - Charitable trust - Cost of assets allowed as application of income

Assessee-trust was registered under section 12AA. It claimed that it was entitled to depreciation under section 32 on assets whose cost was allowed as application of income towards charitable purposes, by placing reliance on the decision of Apex Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation (2018) 402 ITR 441 (SC): 2017 TaxPub(DT) 5384 (SC). CIT (A) alleged that since the capital expenditure was already allowed as application of income towards charitable purposes, the allowance of depreciation would amount to double deduction. Held: The amendment in section 11(6) brought about by Finance Act, 2014 which became effective from assessment year 2015-16 prohibited the allowance of depreciation where the capital expenditure was already allowed as application of income towards charitable purposes and said amendment was prospective in nature. In view of the judgment of apex Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation (2018) 402 ITR 441 (SC) : 2017 TaxPub(DT) 5384 (SC), the assessee would be entitled to depreciation under section 32 on assets whose cost was allowed as application of income towards charitable purposes.

Followed:CIT v. Rajasthan and Gujarati Charitable Foundation (2018) 402 ITR 441 (SC): 2017 TaxPub(DT) 5384 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :



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