Depreciation for charitable assets upheld in income calculation appeal decision

The Tribunal allowed the appeals filed by the assessee, holding that depreciation should be considered for calculating income under Sections 11 and 12 of the Income-tax Act, 1961. The claim for depreciation on assets as an application for charitable purposes was upheld, rejecting the Assessing Officer's contention of double deduction. The decision emphasized that depreciation should be deducted from income to determine funds for the trust, in line with a High Court ruling. The order was pronounced on 24th June, 2011.

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Issues involved:
The issue involved in this case is whether the allowance of depreciation should be considered in working out the utilization for computing income of the assessee, who was registered u/s 12AA of the Income-tax Act, 1961.

Summary:

Issue 1: Allowance of Depreciation for Computing Income
The assessee claimed depreciation on its assets as an application for charitable purpose. The Assessing Officer disallowed the claim, stating it would amount to double deduction. The CIT(Appeals) upheld the disallowance based on previous court decisions. However, the appellant argued that depreciation should be allowed as a deduction. The Tribunal referred to a High Court decision where it was held that depreciation should be reduced from income for determining the funds to be applied for the trust, and there was no double deduction. No other decision against the assessee was presented, leading the Tribunal to allow the appeals and consider depreciation for calculating the income under Sections 11 and 12 of the Act.

Conclusion:
Both appeals filed by the assessee were allowed, and the order was pronounced on 24th June, 2011.

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