Shanti Prime Publication Pvt. Ltd.
Sec. 11 of Income Tax Act, 1961 – Charitable Purpose – Depreciation was allowed on the assets, the cost of which has been fully allowed as application of income under section 11.
Facts: - Whether depreciation was allowable on the assets, the cost of which has been fully allowed as application of income under section 11 in the past years?
Held, that court rejected the argument on behalf of the Revenue that section 32 was the only section granting benefit of deduction on account of depreciation. It was held that income of a charitable trust derived from 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 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 the result, question was answered in favour of the assessee – KRUPANIDHI EDUCATION TRUST [2020] 423 ITR 616 (KARN)