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TMI Blog2012 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure as application of income and depreciation on the same assets which have already been claimed as application of income." 3. Briefly stated, the facts of the case are that the Assessing Officer noted that the assessee society was registered u/s 12A of the Income Tax Act, 1961 vide registration dated 20.10.1989 with the objectives to establish, maintain and/or grant aid in cash and/or in kind to hospitals, medical schools, medical colleges, nursing institutions, sanatoria, charitable and/or traveling dispensaries, aftercare clinics, maternity homes, child welfare centres and parks, and also health check camps related to eyesight, hearing, blood analysis etc. The Assessing Officer also noted that the activities of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as justified and on reasonable ground. He further submitted that the ld. Commissioner of Income Tax(A) allowed the appeal of the assessee society on misrepresented facts and wrongly held that the claim of depreciation does not amount to double deduction. Therefore, the impugned order may be set aside restoring the order of the Assessing Officer u/s 154 of the Act. 5. At the outset, it would be appropriate to mention that the Hon'ble Jurisdictional High Court of Delhi in their order in ITA No. 140/2012 Director of Income Tax vs Vishwa Jagriti Mission dated 29.3.2012 held that in computation of the income of charitable trust/institution, the depreciation of assets owned by the trust/institution is a necessary deduction on commercial principl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ples in order to determine the amount of income available for application to charitable purposes. It was a case where the assessee was carrying on business and the statutory computation provisions of Chapter IV-D of the Act were applicable. In the present case, we are not concerned with the applicability of these provisions. We are concerned only with the concept of commercial income as understood from the accounting point of view. Even under normal commercial accounting principles, there is authority for the proposition that depreciation is a necessary charge in computing the net income. Secondly, the Supreme Court was concerned with the case where the assessee had claimed deduction of the cost of the asset under section 35(1) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54 of the Act was based on wrong interpretation of the provisions of the Act applicable to the charitable trusts and societies and the ld. Commissioner of Income Tax(A) rightly held that the income of the charitable trust and society was to be computed on commercial basis i.e. as per normal principles of accounting which clearly indicates that the depreciation should be deducted to arrive at net income. Ld. Commissioner of Income Tax(A) has rightly given benefit of the ratio of the judgment of Hon'ble Jurisdictional High Court of Delhi in their order in ITA No. 140/2012 Director of Income Tax vs Vishwa Jagriti Mission (supra) and Gujarat High Court in the case of Commissioner of Income Tax v Sheth Manilal Ranchhoddas Vishram Bhavan Trust (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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