TaxTMI 
TaxTMI 
2015 (6) TMI 754
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....d 30.12.2011. The DIT(E), on perusal of the assessment records was of the view that the order of assessment dated 30.12.11 was erroneous and prejudicial to the interests of Revenue. The DIT(E) noticed that the AO completed the assessment denying the exemption of capital expenditure claimed u/s.11(1)(a) of the Act as application of income of the Trust, since the registration u/s.12A of the Act had been cancelled by the DIT(E). He further noticed from the details of depreciation claimed, that the depreciation was claimed on the opening WDV which is inclusive of assets acquired during earlier years, wherein the expenditure towards acquisition of the said assets has already been claimed by the assessee as capital expenditure towards application....
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....in P.K. Badiani v. CIT, (1976) 105 ITR 642 (SC) wherein it was observed that allowance of depreciation is to replace the value of an asset to the extent it is depreciated during the period of account relevant to assessment year and as the value to that extent had been lost, the corresponding allowance of depreciation takes place. He also referred to the decision in Mysore Minerals Ltd. v. CIT, (1999) 239 ITR 775 wherein it was observed that the concept of depreciation suggests that tax benefit on account of depreciation legitimately belongs to one who has invested in the capital asset in utilising the capital asset and thereby losing gradually investment cost by wear and tear and need to replace the same by having lost its value fully over ....
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....n claimed on cost of capital assets (1) (2) (3) (4) 2006-07 12,11,79,731 5,67,99,662 9,21,576 2007-08 12,41,08,027 25,99,22,313 33,87,452 2008-09 14,53,81,247 9,14,39,711 11,79,089 2009-10 17,27,36,619 2,46,47,797 30,60,985 6. The DIT(E) finally concluded that order of AO was erroneous and prejudicial to the interests of Revenue and accordingly set aside the assessment with a direction to rework the depreciation allowable on the WDV of assets, after taking into account the cost of assets which has already been allowed as application of income in the previous years and no depreciation should be allowed on such assets. 7. Aggrieved by the order of DIT(E), the assessee has prefe....
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....mount of depreciation debited in the books is deductible while computing such income. It was so held by the Hon'ble Karnataka High Court in the case of CIT Vs. Society of Sisters of St. Anne 146 ITR 28 (Kar). It was held in CIT vs. Tiny Tots Education Society (2011) 330 ITR 21 (P&H) , following CIT vs. Market Committee, Pipli (2011) 330 ITR 16 (P&H) : (2011) 238 CTR (P&H) 103 that depreciation can be claimed by a charitable institution in determining percentage of funds applied for the purpose of charitable objects. Claim for depreciation will not amount to double benefit. The decision of the Hon'ble Supreme Court in the case of Escorts Ltd. 199 ITR 43 (SC) have been referred to and distinguished by the Hon'ble Court in the aforesaid decisi....
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....d in the books is deductible while computing such income. In view of the aforesaid decision on the issue, we are of the view that the order of the CIT(A) on the above issue does not call for any interference. 22. Consequently, ground No.5 raised by the revenue is dismissed." 10. We may also add that the legal position has since been amended by a prospective amendment by the Finance (No.2) Act, 2014 w.e.f. 1.4.2015 by insertion of sub-section (6) to section 11 of the Act, which reads as under:- "(6) In this section where any income is required to be applied or accumulated or set apart for application, then, for such purposes the income shall be determined without any deduction or allowance by way of depreciation or otherwise in resp....