TMI Blog2012 (5) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... - 30-4-2012 - N.S. SAINI, VIKAS AWASTHY, JJ. ORDER N.S. Saini, Accountant Member This is an appeal filed by the assessee against the order of the ld. CIT(A)-XII, dated 22.9.2011. 2. The sole grievance of the assessee in this appeal is that the ld.CIT(A) erred in confirming the disallowance of depreciation of Rs. 34,38,417/- made by the Assessing Officer while computing the income of the assessee-trust. 3. We have heard the rival submissions and perused the orders of the lower authorities and materials available on record. In the instant case, the assessee filed return of income for assessment year 2007-08 admitting NIL income after claiming deduction u/s 11 of the Act. The Assessing Officer, in his order u/s 143(3), w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee by the said order of the Tribunal. 6. On the other hand, the ld. DR supported the orders of the lower authorities. 7. After considering the rival submissions and perusing the materials available on record, we find that the Tribunal in the above mentioned case, while deciding the similar issue, has allowed the claim of depreciation to the assessee by observing as under: "5. We have perused the orders and heard the rival contentions. For the purpose of determining the income of a Trust eligible for exemption under Section 11 of the Act, income arising from property held under Trust, constitutes the income of the Trust. It will mean income from property, business, dividends, interest on securities or other interest. In other words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the capital value of the assets on which depreciation was claimed had been allowed as a deduction under Section 11, as an application of income for religious or charitable purposes. Once again in CIT v. Institute of Banking Personnel Selection (IBPS) 264 ITR 110, Hon'ble Bombay High Court held that depreciation should be allowed even on assets, the cost of which had been allowed as exempt under Section 11 in the preceding years. Their Lordship also held that depreciation should be allowed even on assets received on transfer from another charitable Trust on which no cost was borne by the assessee Trust. Other High Courts which have also taken the view that depreciation is deductible are Hon'ble Karnataka High Court in the case of CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o this decision cannot be drawn as in the case of Escorts ( supra ) both were deductions under the head 'business income' whereas in case of a charitable Trust depreciation is a deduction to arrive at income and capital expenditure is application of such income. The aforesaid decision in the case of Escorts Ltd. cannot be applied to determine taxable income for a Trust as the provisions to determine taxable income of the Trust are totally different and normal provisions for computing income under five heads cannot be applied. Thus the assessee is eligible for claiming depreciation for all these assessment years. The orders of the authorities below are set aside and the A.O. is directed to allow the claim of depreciation. " 8. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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