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2018 (11) TMI 45 - AT - Income TaxClaim of depreciation while claiming exemption u/s 11 - Held that:- Normal depreciation can be considered as a legitimate deduction in computing the real income of the assessee on general priciples or under section 11(1) (a) of the Income-tax Act, 1961. Income of a charitable trust derived from building, plant and machinery and furniture is liable to be computed in a normal commercial manner although the trust may not be carrying on any business and the assets in respect where of depreciation is claimed may not be business assets. In all such cases, section 32 of the 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 the gross income of the trust. - See COMMISSIONER OF INCOME-TAX VERSUS INSTITUTE OF BANKING PERSONNEL SELECTION [2003 (7) TMI 52 - BOMBAY HIGH COURT] - decided against revenue Carry forward of deficit and allowing set off against the income of subsequent years - Held that:- Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment had been made having regard to the benevolent provisions contained in section 11 of the Act and such adjustment will have to be excluded from the income of the trust under section 11(1)(a). - Decided against revenue
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