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2022 (6) TMI 127 - Income Tax
Exemption u/s 11 - disallowance of claim of depreciation - HELD THAT:- As through the decision of the Hon’ble Apex Court in the case of Rajasthan and Gujarati Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT] we are in agreement with the assessee that the issue of disallowance of depreciation, in the backdrop of the fact that the assessee has already been allowed the cost of investment in fixed assets as application of income as per the provisions of Section 11 of the Act, has already been settled by the Hon’ble Apex Court in favour of the assessee, categorically holding that the assessee is entitled to the same. We have noted that the Hon’ble Apex Court has taken note of the amendment to the Act in this regard in Section 11 (6) vide Finance Act 2/2014,denying claim of depreciation in such circumstances and has held the same to be prospective in nature, with effect from assessment year 2015-16.
Thus with the assessee being a charitable trust registered as such u/s. 12AA of the Act and having claimed depreciation on assets, investments in which had been allowed as application of income in preceding years as per the provisions of Section 11 of the Act and the impugned assessment year being assessment year 2014-15, the issue we find is squarely covered by the decision of the Hon’ble Apex Court in its favour.
In view of the same, we hold that the assessee is entitled to deduction of depreciation and the A.O. is directed accordingly to allow the same for the purposes of computing its income. Ground of appeal raised by the assessee is accordingly allowed.