TMI Blog2015 (3) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... trust like the present assessee derived from the depreciable heads is also liable to be computed on commercial basis, however, while doing so it is to be kept in mind that ultimately assessee is a charitable institution and its income for tax purposes is required to be determined by taking into consideration provisions of Section 11 of the Act of 1961 after extending normal depreciation and deductions from its gross income. In computing the income of a charitable institution/trust depreciation of assets owned by such institution is a necessary deduction on commercial principles, hence, the amount of depreciation has to be deducted to arrive at the income available. Thus ITAT rightly allowed depreciation claimed by the assessee on capital as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt advanced is substantiated by placing reliance upon a Division Bench judgment of High Court of Delhi in Director of Income Tax (Exemption) v. Charanjiv Charitable Trust, reported in [2014] 43 taxmann.com 300 (Delhi) . In the case aforesaid the Delhi High Court held that if the cost of asset has been allowed as deduction by way of application of income then the depreciation on the same asset cannot be allowed in computation of the income of the trust. Reliance is also placed by learned counsel for the revenue upon a judgment of High Court of Kerala in Lissie Medical Institutions v. Commissioner of Income Tax, Kochi, reported in [2012] 24 taxmann.com 9 (Ker.) , holding that when acquisition of assets is treated as application of income for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that when the full expenditure had been allowed to a charitable institution in the year of acquisition of assessment, the amount spent on acquiring the assets are required to be treated as application of income of the trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing income from those assets in subsequent years, depreciation in respect of those assets cannot be taken into account. We have considered the arguments advanced. The assessee is a charitable institution registered under Section 12-A of the Act of 1961 and 100% capital expenditure was availed by it against the asset concerned i.e. a building. Section 32(1) of the Act of 1961 provides for depreciation in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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