INCOMED TAX ACT, 1961

Section 11

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

Assessee-trust claimed depreciation on assets. AO rejected assessee's claim on the ground that entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable purposes under section 11(1)(a) in respective years in which such assets were procured, therefore, if depreciation was allowed, same would result in double deduction.Held: Sub-section (6) to section 11 was inserted by Finance (No. 2) Act, 2014, with effect from 1-4-2015, which states that if acquisition of assets had been claimed as application, then depreciation is not allowable. The said sub-section(6) of section 11 was applicable with effect from 1-4-2015, therefore, denial of depreciation during the year under consideration, i.e., assessment year 2012-13 was not justified and claim of depreciation had to be allowed even if cost of asset was treated as application of income for charitable purpose.

Followed:CIT v. Siliguri Regulated Market Committee (2014) 366 ITR 51 (Cal) : 2014 TaxPub(DT) 3376 (Cal-HC) and Indraprastha Cancer Society [ITA No. 240 of 2014) 18-11-2014 (Del-HC) : 2015 TaxPub(DT) 12 (Del-HC) and DIT (Exemption) v. Al Ameen Charitable Fund Trust (2016) 67 Taxmann.com 160 (Karn) : 2016 TaxPub(DT) 1833 (Karn-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

INCOME TAX ACT, 1961

Section 11(1A)

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