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2015 (9) TMI 272 - AT - Income TaxDepreciation claim denied - as at the time of acquiring the relevant capital asset, cost of acquisition was considered as application of income in the year of its acquisition thus allowing depreciation would amount to allowing double deduction - assessee is a charitable trust with objects to provide education - CIT(A) allowed claim - Held that:- The issue raised by the revenue in the ground of appeal is thus no longer res integra and has been decided in the case of CIT v. Market Committee, Pipli (2010 (7) TMI 374 - Punjab and Haryana High Court) wherein after considering several decisions on that issue and also the decision of the Hon’ble Supreme Court in the case of Escorts Ltd. (1992 (10) TMI 1 - SUPREME Court ), came to the conclusion that depreciation is allowable on capital assets on the income of the charitable trust for determining the quantum of funds which have to be applied for the purpose of trusts in terms of section 11 of the Act. The Hon’ble Supreme Court in the case of Escorts Ltd. (supra) observed that as dealing with a case of two deductions under different provisions of the Act, one u/s. 32 for depreciation and the other on account of expenditure of a capital nature incurred on scientific research u/s. 35(1)(iv) of the Act. The Hon’ble Court thereafter held that a trust claiming depreciation cannot be equated with a claim for double deduction. Also see CIT v. Society of Sisters of Anne (1983 (8) TMI 44 - KARNATAKA High Court)- Decided against revenue. Entitlement to trust to carry forward expenditure incurred in excess of its income for setting off against income of the succeeding years - CIT(A) allowed claim - Held that:- So long as the expenditure incurred is on religious or charitable purposes, it is the expenditure properly incurred by the trust, and the income from out of which that expenditure is incurred, would not be liable to tax. The expenditure, if incurred in an earlier year is adjusted against the income of a later year, it has to be held that the trust had incurred expenditure on religious and charitable purposes from the income of the subsequent year, even though the actual expenditure was in the earlier years, if in the books of account of the trust such earlier expenditure had been set off against the income of the subsequent year. The expenditure that can be so adjusted can only be expenditure on religious and charitable purposes and no other. See CIT Vs. Society of Sisters of St. Anne ((1983 (8) TMI 44 - KARNATAKA High Court). - Decided against revenue.
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