Depreciation and statutory contribution treated as allowable application of income for charitable institutions under settled precedent.

Depreciation on fixed assets may be claimed by a charitable institution while computing income under sections 11 to 13, even where the capital outlay has already been treated as application of income. A statutory contribution to the Haryana State Agricultural Marketing Board under section 27 of the Punjab Agricultural Produce Market Act, 1961 was also treated as allowable application of income for charitable purposes. The note records that both questions were covered by earlier binding decisions and that the Revenue's challenge failed, leaving the impugned order undisturbed.

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Issues: (i) Whether depreciation on fixed assets was allowable to the assessee while computing income under sections 11 to 13 of the Income-tax Act, 1961. (ii) Whether the contribution made to the Haryana State Agricultural Marketing Board under section 27 of the Punjab Agricultural Produce Market Act, 1961 was allowable as application of income for charitable purposes.

Issue (i): Whether depreciation on fixed assets was allowable to the assessee while computing income under sections 11 to 13 of the Income-tax Act, 1961.

Analysis: The issue was treated as already covered by the Court's earlier decision, which accepted that depreciation could be claimed even where the capital expenditure had been treated as application of income.

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

Issue (ii): Whether the contribution made to the Haryana State Agricultural Marketing Board under section 27 of the Punjab Agricultural Produce Market Act, 1961 was allowable as application of income for charitable purposes.

Analysis: The issue was also treated as covered by an earlier decision of the Court holding the contribution to be allowable in the facts of the case.

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

Final Conclusion: The appeal failed in light of binding prior decisions on both questions, and the impugned order was left undisturbed.

Ratio Decidendi: Depreciation may be allowed to a charitable institution even where the corresponding capital outlay is treated as application of income, and a contribution made under a statutory obligation may constitute allowable application of income where so treated in the governing factual and legal context.

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