Whether a trust can claim depreciation?

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Nihal Joshi (Querist)

15 April 2015 Dear Sir,

Please tell me whether a trust can get a double deduction in fixed assets? First by claiming addition to fixed assets as income applied to charity and second by claiming depreciation on that asset again? Is this possible?

Thanks and Regards,
Nihal Joshi

CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)

15 April 2015 No. A trust can't claim depreciation on assets being claimed as 'applicaion'.
This was cubed by amending the IT Act in the Finance Act 2013.

Nihal Joshi

Nihal Joshi (Querist)

15 April 2015 Thank you sir but there are many cases in which double deduction was allowed, so can i use those case laws during appeal because the trust for which i am asking is in scrutiny for A.Y. 2012 - 13 and in Assessment Order depreciation was disallowed.?

CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)

15 April 2015 There are many case laws against also.
I.e, Lissie Medical Trust V/s CIT (Kerala HC). and many are there.
If at your High Court jurisdiction there is a case favorable to you, then you may use it for AY 2013-14 since it is before the amendment.
But if there is a decision in Supreme Court, then you have to treat the same as the final decision on it.

The amendment was prospective in nature.

Nihal Joshi

Nihal Joshi (Querist)

15 April 2015 Ok one more question. Suppose I have purchased Fixed Assets in A.Y. 2014 - 15 but i cant get double deduction. If i saw it as application of Income in A.Y. 2014 - 15 then can i claim depreciation in subsequent assessment years?

CA John Abraham Austin ACA

CA John Abraham Austin ACA (Expert)

15 April 2015 No. You can't. If you have claimed it as 'Application of Income' at any time, you can not claim depreciation forever.

Nihal Joshi

Nihal Joshi (Querist)

17 April 2015 Thank you so much John Sir

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