TaxTMI 
TaxTMI 
2021 (7) TMI 783
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.... the Income Tax Appellate Tribunal, Chennai, "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 as....
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.... the assessee has filed the above appeals. 3. In the 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 A....
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....us High Courts granting benefit of depreciation on the assets acquired by the respondents-assessees. 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 c....
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....ssee 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 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 sect....
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....o 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 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 ....
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.... Institutions v. Commissioner of Income Tax'. 4. It may also be mentioned at this stage that the legislature, realising that there was no specific provision in this behalf in the Income Tax Act, has made amendment in Section 11(6) of the Act vide Finance Act No. 2/2014 which became effective from the Assessment Year 2015-2016. The Delhi High Court has taken the view and rightly so, that the said amendment is prospective in nature. 5. It also follows that once assessee is allowed depreciation, he shall be entitled to carry forward the depreciation as well. For the aforesaid reasons, we affirm the view taken by the High Courts in these cases and dismiss these matters. 6. Therefore, following the judgment reported in....