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2021 (7) TMI 1023 - AT - Income TaxAssessment of trust - depreciation on assets whose cost has been allowed as application of income to charitable purpose u/s.11(1)(a) - HELD THAT:- Hon’ble Supreme Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] where after considering the amendment in section 11(6) of the Act, by the Finance Act, 2014 held that the assessee is entitled to depreciation u/s. 32 of the Act on assets whose cost has been allowed as application to charitable purpose. The court further observed that once the assessee is allowed depreciation, it shall be entitled to carry forward depreciation as well. The Hon’ble Karnataka High Court in the case of Pr.CIT (Exemptions) vs. Shushrutha Educational Trust [2018 (12) TMI 329 - KARNATAKA HIGH COURT, had considered an identical issue and by following the decision of the Hon’ble Supreme Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation held that charitable institutions are entitled to depreciation on assets whose cost has been allowed as application of income. The court further noted that excess application of income for charitable purpose can be carry forward to subsequent years and further set-off against income of the trust in the subsequent years. Thus we are of the considered view that the AO as well as the ld.CIT(A) were erred in not allowing depreciation on assets and further carry forward of excess application of income to subsequent years. - Decided in favour of assessee.
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