| COURT: | Supreme Court |
| CORAM: | A.K. Sikri J., Ashok Bhushan J |
| SECTION(S): | 11(6), 32 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Charitable purpose, Depreciation |
| COUNSEL: | Shashi N. Kapila |
| DATE: | December 13, 2017 (Date of pronouncement) |
| DATE: | December 22, 2017 (Date of publication) |
| AY: | - |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 11(1)(a) vs. 32: Even if the entire expenditure incurred for acquisition of a capital asset is treated as application of income for charitable purposes u/s 11(1)(a) of the Act, the assessee is also entitled to depreciation u/s 32. The argument that the grant of depreciation amounts to giving double benefit to the assessee is not acceptable. S. 11(6) which bars depreciation on expenditure applied for charitable purposes is prospective and applies only from AY 2015-16 | |
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
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