Deduction of depreciation to trust

Tax queries 633 views 6 replies

whether sub section (6) of sec 11 regarding non allowance of depreciation to Trust is applicable from F.Y. 2014-15 or 2015-16

Replies (6)

It was inserted by F.A No.2 of 2014 and is applicable from 1.4.2015. 

so, it means we can claim deduction of depreciation upto F.Y. 2014-15.

Check the jurisdiction of the assessee aswell since even prior to the amendments few High Courts disallowed the depreciation.

Eg Lissie Medical Institutions v. CIT (2012) 348 ITR 344 (Ker.)(High Court))  

There were few more

 

 

Text from the memorandum

"These amendments will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent assessment years"

A.Y 15-16 means F.Y 14-15

 

The second issue which has arisen is that the existing scheme of section 11 as well as section 10(23C) provides exemption in respect of income when it is applied to acquire a capital asset. Subsequently, while computing the income for purposes of these sections, notional deduction by way of depreciation etc. is claimed and such amount of notional deduction remains to be applied for charitable purpose. Therefore, double benefit is claimed by the trusts and institutions under the existing law.

 

The provisions need to be rationalised to ensure that double benefit is not claimed and such notional amount does not get excluded from the condition of application of income for charitable purpose.
In view of the above, it is also proposed to amend the Act to provide that under section 11 and section 10(23C), income for the purposes of application shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under these sections in the same or any other previous year.

 

 


 

Dear Sir,

Please clarify my doubt, it is mentioned that amendments will take effect from 1st, April 2015.

Whether it means F.Y. 2015-16 or A.Y. 2015-16. 

As explained in memorandum , its from A.Y starting from 1.04.15

Whenever Year is mentioned in budget , it is by default A.Y unless mentioned

What I was trying to say that even prior to the amendment it was held to be disallowed by some HC 

Thanks for your valuable response


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