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TMI Blog2021 (8) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... nal 'A' Bench, Chennai for the assessment year 2010-11. 2.The appeal was admitted on 28.09.2016, on the following substantial questions of law:- "a) Whether on the facts and circumstances of the case, the Tribunal was right in law in holding that while computing income under section 11(1)(a) of the Income Tax Act, 1961, depreciation is not to be allowed? b) Whether the Appellate Tribunal was right in law in holding that deduction of depreciation under Sec.32 falls under chapter 'Profit and gains from business and profession' of the Income tax Act, 1961 and would therefore not be available to a Charitable Trust where income is otherwise not assessable under the above head? and c) Whether the Tribunal was right in law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch year the depreciation was claimed, the entire expenditure incurred for acquisition of capital assets was treated as application of income for charitable puruposes under Section 11(1)(a) of the Act. The view taken by the Assessing Officer in disallowing the depreciation which was claimed under Section 32 of the Act was that once the capital expenditure is treated as application of income for charitable purposes, the assessees had virtually enjoyed a 100 per cent write off of the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit to the assessee. Though it appears that in most of these cases, the CIT (Appeals) had affirmed the view, but the ITAT reversed the same and the High Courts have accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ? It was held by the Bombay High Court that section 11 of the Income Tax Act makes provision in respect of computation of income of the Trust from the property held for charitable or religious purposes and it also provides for application and accumulation of income. On the other hand, section 28 of the Income Tax Act deals with chargeability of income from profits and gains of business and section 29 provides that income from profits and gains of business shall be computed in accordance with section 30 to section 43C. That, section 32(1) of the Act provides for depreciation in respect of building, plant and machinery owned by the assessee and used for business purposes. It further provides for deduction subject to section 34. In that matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the question which was raised before the Bombay High Court in the case of Director of Income-tax (Exemption) v. Framjee Cawasjee Institute [1993] 109 CTR 463. In that case, the facts were as follows: The assessee was the Trust. It derived its income from depreciable assets. The assessee took into account depreciation on those assets in computing the income of the Trust. The ITO held that depreciation could not be taken into account because, full capital expenditure had been allowed in the year of acquisition of the assets. The assessee went in appeal before the Assistant Appellate Commissioner. The Appeal was rejected. The Tribunal, however, took the view that when the ITO stated that full expenditure had been allowed in the year of acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X
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