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2011 (6) TMI 256 - AT - Income TaxCharitable trust - Depreciation - Application of income - dual benefit - held that:- The entity has effectively capitalized the income. - The same would, over time, secure it deduction - by way of depreciation - for the entire capital cost incurred, so that the same is not considered as a part of income and, consequently, not subject to tax to that extent. How, then, can another claim for application of the said capitalized income, and with reference to the same capital asset(s), arise? Capital expenditure as being toward income (so that it has to be allowed proportionately over the period of utility of the expenditure), and at the same time – out of it. The 'income' to be applied is only one determined following the principles of commercial accounting, i.e., to arrive at what can be said to be available 'for application' with it, so that there is no overlap between the two. - Claim of depreciation rejected in respect of capital goods where the cost of such asset allowed by way of application u/s 11(1)
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