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2017 (3) TMI 896 - HC - Income TaxDepreciation on assets of trust - One of the earliest judgment is from Karnataka High Court in Commissioner of Income Tax, Karnataka-I Vs. Society of the Sisters of St. Anne 1984 (1983 (8) TMI 44 - KARNATAKA High Court ). Court observed that income derived from property held under trust cannot be total income because Section 11(1) shows that former shall not be included in latter, of the person in receipt of the income. Depreciation is nothing but decrease in value of property through wear, deterioration or obsolescence and allowance is made for this purpose in book keeping, accountancy, etc. - Decided in favour of assessee. Payment of scholarship - admissibility as charitable expenditure - Held that:- Scholarship was disbursed for pursuing Engineering course from University of California, Los Angeles, USA. The candidate was selected after a process of selection and finding him most deserving candidate, scholarship was disbursed to the said incumbent. This is in the process of charitable object of Assessee - Society for advancement of higher technical education to deserving students. It cannot be doubted that advancement of education is a 'charitable purpose'. The candidate, beneficiary, was directly or indirectly not related to Members of Society nor otherwise has any bearing or connection with the Society Members. Financial status of the said student or other things are immaterial so far as purpose for which scholarship to Adheesh Bhagat is concerned. Hence we are in agreement with the view taken by CIT(A) as also Tribunal that payment of scholarship was admissible as charitable expenditure. Question answered in favour of Assessee.
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