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2022 (10) TMI 38 - HC - Income TaxExemption u/s 11 - CIT(A) justification in allowing depreciation on an asset already treated as application of income - HELD THAT:- The issue has been concluded by this Court in the Case of Institute Of Banking Personnel Selection (IBPS)’’ [2003 (7) TMI 52 - BOMBAY HIGH COURT] held that normal depreciation can be considered as a legitimate deduction in computing the real income of the assessee on general principles or under section 11(1)(a) of the Income Tax Act The Court rejected the argument on behalf of the revenue that section 32of the Income Tax Act was the only section granting benefit of deduction on account of depreciation. Income of a Charitable Trust derived form building, plant and machinery and furniture was liable to be computed in 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 Income Tax 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 gross income of the Trust. This view was noticed with approval by the Hon’ble Supreme Court in the case of ‘Commissioner of Income Tax-III, Pune v. Rajasthan & Gujarati Charitable Foundation Poona’’ [2017 (12) TMI 1067 - SUPREME COURT] Appeal dismissed.
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