TaxTMI 
TaxTMI 
2018 (9) TMI 1554
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....ct that the assessee had claimed the amount incurred on purchase of assets in earlier year as application of income. Secondly, the Revenue is aggrieved by allowance of claim of carry forward of losses disregarding the fact that the set off and carry forward of losses have been dealt with by the provisions of sections 70, 71, 72, 73 and 74 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short]. 3. Briefly stated, the facts of the case are that the assessee-society was running a hospital in the name of Dr. R.L. Khera Hospital in Pandav Nagar in Naraina in New Delhi. The assessee had claimed depreciation of Rs. 1.32 crores, which has been disallowed by the Assessing Officer mainly on the ground that this is a d....
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.... on the assets, the cost of which has been fully allowed as application of income under section 11 in the past years? In the case of CIT v. Munisuvrat Jain 1994 Tax Law Reporter, 1084 the facts were as follows. The assessee was a Charitable Trust. It was registered as a Public Charitable Trust. It was also registered with the Commissioner of Income Tax, Pune. The assessee derived income from the temple property which was a Trust property. During the course of assessment proceedings for assessment years 1977-78, 1978-79 and 1979-80, the assessee claimed depreciation on the value of the building @2½% and they also claimed depreciation on furniture @ 5%. The question which arose before the Court for determination was : whether ....
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.... of deduction on account of depreciation. It was held that income of a Charitable Trust derived form building, plant and machinery and furniture was liable to be computed in normal commercial manner although the Trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets. In all such cases, section 32 of the Income Tax Act providing for depreciation for computation of income derived from business or profession is not applicable. However, the income of the Trust is required to be computed under section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the Trust. In view of the aforesatated judgment of ....
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.... against the income of subsequent year would amount to application of income of the Trust for charitable purposes in the subsequent year within the meaning of Section 11(1)(a) of the Act?" 9. The relevant findings of the Hon'ble High Court of Delhi [supra] read as under: "6. We find from the order of the Income Tax Appellate Tribunal (hereinafter referred to as "the Tribunal‟) that the Tribunal has decided the issue in favour of the assessee by placing reliance on the aforesaid judgment of the Gujarat High Court. We have gone through the judgment of Gujarat High Court in Shri Plot Swetamber Murti Pujak Jain Mandal (supra). It could not be disputed by the learned counsel for the Revenue that the question of law....
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....t decide the question correctly. She submitted that the Gujarat High Court proceeded on the premise that there was no limitation in Section 11, which provides that the income should have been applied for charitable or religious purposes „only‟ in the year in which the income has arisen. This, according to the learned counsel, was a wrong premise and contrary to the expression of provision contained inSection 11(1)(c) read with explanation and Section 11(1)(c) categorically suggests to the contrary, viz., the income has to be applied for charitable or religious purposes „only‟ in the year in which it has arisen. However, we find that the Gujarat High Court has discussed this issue in greater detail and relying upon th....
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....application of income for charitable or religious purposes. In the present case, the Assessing Officer did not allow carry forward of the excess of expenditure to be set off against the surplus of the subsequent years on the ground that tin the case of a charitable trust, their income was assessable under self-contained code mentioned insection 11 to section 13 of the Income-tax Act and that the income of the charitable trust was not assessable under the head "Profits and gains of business" under section 28 in which the provision for carry forward of losses was relevant. That, in the case of a charitable trust, there was no provision for carry forward of the excess of expenditure of earlier years to be adjusted against income of the subsequ....