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2018 (8) TMI 1865 - HC - Income TaxDepreciation of assets acquired by assessee trust - whether the capital expenditure is treated as application of income for charitable purposes? - HELD THAT:- Allowability and depreciation in the hands of the religious and charitable trust is allowable as relying on RAJASTHAN AND GUJARATI CHARITABLE FOUNDATION POONA [2017 (12) TMI 1067 - SUPREME COURT] Carrying forward of the losses for being set off against the income of the charitable trust - HELD THAT:- Income of a charitable trust derived from building, plant and machinery and furniture is liable to be computed in a normal commercial manner although the trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets. In all such cases, section 32 of the Act providing for depreciation, for computation of income derived from business or profession is not applicable. However, the income of the trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from the gross income of the trust. Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied, then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment had been made having regard to the benevolent provisions contained in section 11 of the Act and such adjustment will have to be excluded from the income of the trust under section 11(1)(a). See OHIO UNIVERSITY CHRIST COLLEGE [2018 (11) TMI 1055 - KARNATAKA HIGH COURT]
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