2017 (12) TMI 1067 - SC - Income Tax

Depreciation of assets acquired by assessee trust - the capital expenditure is treated as application of income for charitable purposes - Held that:- As in Commissioner of Income Tax v. Institute of Banking Personnel Selection (IBPS) [2003 (7) TMI 52 - BOMBAY High Court] correctly states the principles of law and there is no need to interfere with the same.

It may be mentioned that most of the High Courts have taken the aforesaid view with only exception thereto by the High Court of Kerala which has taken a contrary view in 'Lissie Medical Institutions v. Commissioner of Income Tax' [2012 (4) TMI 115 - KERALA HIGH COURT].

It may also be mentioned at this stage that the legislature, realising that there was no specific provision in this behalf in the Income Tax Act, has made amendment in Section 11(6) of the Act vide Finance Act No. 2/2014 which became effective from the Assessment Year 2015-2016. The Delhi High Court has taken the view and rightly so, that the said amendment is prospective in nature.

It also follows that once assessee is allowed depreciation, he shall be entitled to carry forward the depreciation as well.