INCOME TAX ACT, 1961

Section 11 read with Section 32

Charitable trust - Allowability of depreciation - Full expenditure was allowed in the year of acquisition of assets, as application of income -

Assessee was a charitable trust and was registered under section 12A. It was running various educational institutions throughout the State of Karnataka. AO denied depreciation claim to assessee on allegation that assessee was not entitled to claim deduction of any amount twice, while arriving at the income of the concern. Held: Supreme Court in case of CIT v. Rajasthan And Gujarati Charitable Foundation (2018) 402 ITR 441 (SC) : 2017 TaxPub(DT) 5384 (SC), and held that when AO stated that full expenditure was allowed in the year of acquisition of the assets, what he really meant was that the amount spent on acquiring those assets, was treated as application of the income of the Trust in the year in which the income was spent in acquiring those assets. Therefore, it was meant that in computing the income from those assets in the subsequent years, depreciation in respect of those assets cannot be taken into account. Therefore, substantial question of law was held in favour of the assessee and against the revenue.

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. :

INCOME TAX ACT, 1961

Section 11 read with section 40(a)(ia)

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