TMI Blog1999 (7) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... as correct in law in holding the provisions of section 13(2) of the said Act were not attracted ? Question raised in R. A. No. 22(Cal) of 1988 : Whether, on the facts and in the circumstances of the case and on a proper interpretation of section 2(15) of the Income-tax Act, 1961, the Tribunal is correct in law in holding that depreciation claimed in the accounts by the assessee was an outgoing for the purpose of determination of income in terms of section 11(1) of the Income-tax Act, 1961, and in that view deleted the addition so made in this regard ?" The assessee is a trust. The trust received donation to the extent of Rs. 18,11,134 during the accounting year ending June 30, 1982. Such donation includes shares of the face value of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the corpus, it amounts to investment by the assessee. Mr. N. K. Poddar, learned counsel for the assessee, submits that the assessee is a charitable trust. When there was a donation of shares of the assessee, the assessee has not incurred any expense. There is no investment by the assessee in acquiring the shares in question. When there is no investment by the assessee, the provision of section 13(1)(c) is not attracted. For section 13(1)(d), he submits that in view of the Board's circular, the provisions of section 13(1)(d) are applicable with effect from the assessment year 1984-85 and not from the assessment year 1983-84. Therefore, when the provisions of section 13(1)(d) are not applicable in the year 1983-84, no purpose will be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1983-84. At page 115, this court has quoted the Board's circular. The relevant portion of the circular reads as under : "The issue has been considered in the Board and it is decided that the provisions of section 13(1)(d) would be applicable from the assessment year 1984-85 and not from the assessment year 1983-84. It is also decided that appellate decisions on this issue, hitherto in favour of the assessee, may not be further contested, and pending appeals/references may be withdrawn by the Chief Commissioners of Income-tax, in exercise of the powers delegated to them." When the Board itself has clarified the position as to from which assessment year the provisions of section 13(1)(d) will be applicable, it was decided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Wealth-tax Act to section 13(1)(d) of the Income-tax Act and the issue before the court was whether when the assessee received the shares by way of donation it would amount to investment of the assessee. This court held that when there was no investment of the fund of the assessee within the meaning of section 13(2)(h) and when there was no investment of the assessee in acquiring the shares the charitable trust did not fall within the provisions of the Wealth-tax Act, 1957. When the shares are received there was no investment on the part of the assessee. The Tribunal is justified in holding that the assessee's income from shares is not hit by the provisions of section 13(2)(h) read with section 13(1)(c). The question referred regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust should be computed and whether the amount of depreciation debited to the accounts of the charitable institution is to be deducted to arrive at the income available for application to charitable purposes. At page 33, the court has quoted part of the Circular No. 5-P(LXX-6) of 1968, dated July 19, 1968. The Board has clarified that "income" referred under section 11(1) should be understood in its commercial sense, i.e., book income, after adding back any appropriations or applications thereof towards the purpose of the trust or otherwise, and also after adding back any debits made in capital expenditure in regard thereto for the purpose of the trust or otherwise. It should be noted, in this connection, that the amounts so added back will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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