TaxTMI 
TaxTMI 
2021 (7) TMI 783
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...., "B" Bench (for brevity, the Tribunal), the assessee has filed the above appeals. 2.1 The appellant-Trust has been registered under section 12A of the Income Tax Act, 1961 vide order dated 29.07.1988 for running an Engineering College in the name of Anjalaiammal Mahalingam Engineering College at Koilvenni, Tiruvarur District. 2.2 The appellant filed its return of income on 30.10.2008 for the assessment year 2008-2009 declaring Nil income after claiming exemption under section 11 of the Act. Thereafter scrutiny assessment under section143(3) read with section 147 of the Act was completed by the Assessing Officer on 27.12.2010 rejecting the claim of depreciation of Rs. 1,47,97,912/- for the assessment year 2008-09 as the depreciation is no....
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....he above appeals, the assessee has raised the following Substantial Questions of Law for consideration: " (i) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was right in law in holding that the Appellant-Trust will not be entitled to claim depreciation while computing the income of the appellant u/s. 11 of the Income Tax Act, 1961? (ii) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was right in law in holding that treating a capital expenditure as application and allowing depreciation amounts to double deduction? (iii) Whether amendment to section 11(6) of the Income Tax Act, 1961 is only prospective with effect from Assessment Year 2015-16 and ....
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....es. It is a matter of record that all the assessees are charitable institutions registered under 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 a....
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.... furniture @ 5%. The question which arose before the Court for determination was : whether depreciation could be denied to the assessee, 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 section 11 of the Income Tax 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, section 28 of the Income Tax Act deals with chargeability of income from profits and gains of business and section 29 provides that income from profits and gains of business ahll be computed in accordance with secti....
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....ction thereof from gross income of the Trust. In view of the aforesatated judgment of the Bombay High Curt, we answer question No. 1 in the affirmative i.e., in favour of the assessee and against the Department. 4. Question No. 2 herein is identical to the question which was raised before the Bombay High Court in the case of Director of Incometax (Exemption) v. Framjee Cawasjee Institute [1993] 109 CTR 463. 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 ....