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2014 (11) TMI 733 - DELHI HIGH COURT
Entitlement for depreciation - Whether a charitable institution, which has purchased capital assets and treated the amount spent on purchase of the capital asset as application of income, is entitled to claim depreciation on the same capital asset utilised for business – Revenue was of the view that this would amount to double deduction – Held that:- The issue has been examined in depth and detail twice and thus there is no error in the orders passed by the Tribunal - in Director of Income Tax (Exemption) Versus Charanjiv Charitable Trust [2014 (3) TMI 760 - DELHI HIGH COURT] the Tribunal has overlooked that the cost of the assets has already been allowed as a deduction as application of income, as held by the CIT(A) as well as the AO - allowing depreciation in respect of assets, the cost of which was earlier allowed as deduction as application of income of the trust, would actually amount to double deduction - the cost of asset had been allowed as a “deduction” and thereafter depreciation was being claimed - where any income is required to be applied, accumulated or set apart for application, then for such purposes the income shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of an asset, the acquisition of which has been claimed as application of income under this Section in the same or any other previous year - The legal position would undergo a change in terms of Section 11(6), which has been inserted and applicable with effect from 1st April, 2015 and not to the assessment years in question - The newly enacted sub-section relates to application of income – Decided against revenue.