TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 51
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the findings of the CIT (Appeal) allowing the claim of the Respondent-Assessee on depreciation of the asset. The Revenue has raised the following questions of law for consideration:- "a) Whether on the facts of the case and in law the Hon'ble ITAT erred in allowing the appeal of the assessee on account of disallowing depreciation in contravention of the decision of Escorts Ltd. Vs. UOI 199 ITR 43 wherein it was held that since section 11 of the Income Tax Act provides for deduction capital expenditure incurred on assets acquired for the objects of the trust as application and does not specifically & expressly provide for double deduction on account of depreciation on the same very assets acquired from such capital expenditure, no ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....S.L.P.(C) No. 24904 of 2016(C.A.No.8294 of 2016) and in all the cases the issue is pending for adjudication". 2. From what has been urged at the bar, it appears that insofar as the position in law prior to 1st April, 2015 is applicable. The issue in the present proceedings as it relates to assessment year 2011-12, the law stands settled in the authoritative pronouncement of the Supreme Court in the case of Commissioner of Income Tax-III, Pune v. Rajasthan & Gujarati Charitable Foundation Poona [2018] 89 taxmann.com 127 (SC). In such case the proceeding had arisen from the decision of this Court wherein the following question of law was formulated by this Court in Commissioner of Income Tax-III, Pune v. Rajashtani & Gujarati Charitable Fou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f income for charitable purposes 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 assessee had virtually enjoyed a 100% write off the cost of assets and, therefore, the grant of depreciation would amount to giving double benefit to the assessee. Though it appears that in most of these cases, the CIT (Appeals) had affirmed the view, but the ITAT reversed the same and the High Courts have accepted the decision of the ITAT thereby dismissing the appeals of the Income Tax Department. From the judgments of the High Courts, it can be discern....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ligious 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 shall be computed in accordance with section 30 to section 43C. That, section 32 (1) of the Act provides for depreciation in respect of building, plant and machinery owned by the assessee and used for business purposes. It further provides for deduction subject to section 34. In that matter also, a similar argument, as in the present case, was advanced on behalf of the revenue, namely, that depreciation can be allowed as deduction only under section 32 of the Income-tax ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 Assistant Appellate Commissioner. 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 the assets, what he really meant was that the amount spent on acquiring those assets had been treated as 'application of income of the Trust in the year in which the....