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2019 (9) TMI 485 - AT - Income TaxDepreciation to assessee trust - whether the assessee is entitled to 100% deduction of the capital expenditure as well as depreciation thereon under the provisions of section 11(1)(a)? - AO disallowed the claim for depreciation on the assets of such Institutions, on the basis that once the capital expenditure to acquire assets is treated as the application of income for charitable purposes; the Institutions had virtually enjoyed a 100% write-off of the cost of assets - HELD THAT:- There remains no doubt that the assessee besides the cost of capital expenditure is also entitled to the depreciation while working out the income of the charitable institution having valid registration under section 12A of the Act. There is an amendment u/s 11(6) which restricts the claim of the assessee for both the benefit/deduction, i.e. capital expenditure as well as depreciation thereon. As such as per the amendment the assessee is entitled to the deduction on account of depreciation in respect of such capital expenditures which were not claimed as 100% deduction u/s 11(1)(a). This amendment is applicable with effect from 1.4.2015 and the year under consideration before us is the assessment year 2013-14. Thus this amendment is not applicable for the year under consideration. No infirmity in the order of the learned CIT-A. Accordingly, we decline to interfere in the order of the learned CIT (A). Hence the ground of appeal of the Revenue is dismissed. Grant of exemptions to the assessee u/s 11(1)(a) treating the activity of the trust as in the interest of charity - HELD THAT:- Issue regarding the activity of the trust is not arising from the order of the authorities below. As such we are of the view the activities carried out by the assessee had not been doubted. Thus it can be inferred that the assessee is engaged in the charitable activity as envisaged under section 2(15). Once the activities are charitable in nature then, the assessee is entitled to a deduction under section 11(1)(a). No infirmity in the direction provided by the learned CIT (A). The learned DR has also not brought anything on record contrary to the finding of the learned CIT (A). Therefore we do not find any reason to interfere in the order of the learned CIT (A). Hence the ground of appeal of the Revenue is dismissed.
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