Depreciation for charitable trusts and incidental hospital pharmacy activity were upheld as non-commercial and non-perverse findings.

Depreciation claimed by a charitable trust on assets used for its activities was treated as not constituting a double deduction, because the allowance had already been affirmed by binding Supreme Court precedent. The text also notes that a pharmacy or chemist shop operating within hospital premises was found, on the facts, to be integral to the hospital's charitable functioning rather than an independent commercial venture. As no perversity was shown in that factual finding, no substantial question of law arose for appellate interference, and the Revenue's challenge failed on both issues.

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Issues: (i) Whether depreciation claimed by the charitable assessee under Section 32 of the Income-tax Act, 1961 amounted to double deduction. (ii) Whether the pharmacy or chemist shop run in the hospital premises constituted an independent entity or was only incidental to the assessee's dominant charitable activity.

Issue (i): Whether depreciation claimed by the charitable assessee under Section 32 of the Income-tax Act, 1961 amounted to double deduction.

Analysis: The allowance of depreciation on assets used by the charitable trust was already considered and affirmed by the Supreme Court. The view taken in favour of the assessee had thus attained final approval, leaving no surviving substantial question of law on this aspect.

Conclusion: The issue was decided against the Revenue and in favour of the assessee.

Issue (ii): Whether the pharmacy or chemist shop run in the hospital premises constituted an independent entity or was only incidental to the assessee's dominant charitable activity.

Analysis: The finding of fact was that the pharmacy was integrally attached to the hospital's activities and was not a predominant or independent commercial venture. No perversity in that factual finding was shown, and the issue therefore did not give rise to a substantial question of law.

Conclusion: The issue was decided against the Revenue and in favour of the assessee.

Final Conclusion: The Revenue's appeal failed as both proposed questions were answered against it, and the tribunal's dismissal of the Revenue's challenge was left undisturbed.

Ratio Decidendi: Where depreciation on charitable trust assets has been approved by binding precedent and the finding that a pharmacy is merely incidental to the hospital's dominant charitable object is not shown to be perverse, no substantial question of law arises for interference in appeal.

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