TaxTMI 
TaxTMI 
2018 (7) TMI 1166
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.... the assessee trust is running a hospital in the name of Noon Hospital, Bhawani Mandi and is registered u/s 12AA of the Act. During the course of assessment proceedings, the Assessing officer observed that the assessee trust has claimed depreciation of Rs. 71,61,334/- and the same was held not allowable as the entire cost of the asset has been claimed as application of income in the earlier years u/s 11 of the Act. 3. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) and submitted that the matter is covered by the decisions of various High Courts. The ld CIT(A) has stated that the Supreme Court has admitted an SLP against the decision of various High Courts including the Rajasthan High Court in case of CIT(E)....
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....Section 12A of the Income Tax Act (hereinafter referred to as 'Act'). For this reason, in the previous year to the year with which we are concerned and in which 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 ....
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....as expenditure on acquisition of the assets had been treated as application of income in the year of acquisition? It was held by the Bombay High Court that s. 11 of the IT 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, s. 28 of the IT Act deals with chargeability of income from profits and gains of business and s. 29 provides that income from profits and gains of business shall be computed in accordance with s. 30 to s. 43C. That, s. 32(1) of the Act provides for depreciation in respect of building, plant and machinery owned by the assessee and used for the business purposes. I....
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....identical to the question which was raised before the Bombay High Court in the case of Director of Income-tax (Exemption) vs. Framjee Cawasjee Institute (1993) 109 CTR 463 (Bom). 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 AAC. 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 acquisition of ....