9911796707
TMI Blog2012 (5) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... stant 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), while calculating the application of 85% of the trust's income, excluded the assessee's claim of depreciation as the entire capital expenditure itself was treated as application of income. He observed that allowance of depreciation u/s 11(1)(a) amounts to double deduction. Since the revenue expenditure after excluding the depreciation claim of the assessee and deferred revenue expenditure together with the capital expenses were more than 85% of the trust's income as per the provisions of section 11(1)(a) of the Act, the Assessing Officer allowed the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, the income for the purpose of Section 11 of the Act is the income as per the accounts of the Trust. It means, income in the commercial sense, without reference to the heads of income, specified in Section 14 of the Act, i.e. the book income and not total income as defined in Section 2(45) of the Act. This position is confirmed in CIT v. Trustees of H.E.H. Nizam's Supplemental Religious Endowment Trust [1981] 127 ITR 378 (A.P.), CIT v. Rao Bahadur Calawala Cunnan Chetty Charities [1982] 135 ITR 485 (Mad.) and CIT v. Estate of V.L. Ethiraj [1982] 136 ITR 12 (Mad.). T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Society of the Sisters of St. Anne [1984] 146 ITR 28 and Hon'ble Madhya Pradesh High Court in the case of CIT v. Rajpur Pallottine Society [1989] 180 ITR 579. In CIT v. Seth Manilal Ranchhoddas Vishram Bhovan Trust [1992] 105 CTR (Guj) 303 it was held by Hon'ble Gujarat High Court that depreciation should be allowed while computing such income under Section 11(i)(a) of the Act. Assessing Officer's stand that 'provision of computation of income under Section 11' does not contain any provision which may entitle an assessee to claim weighted deduction for any expenses incurred' is not acce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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