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Trust

Tax queries 940 views 1 replies

Learner

Student

409 Points Posted on 09 December 2010

Trust has claimed depreciation. However, AO disallow the claim of depreciation since 100% of the capital expenditure incurred by the assessee on fixed assets has been considered as application for charitable purposes. The claim of depreciation on these assets would amount to double deduction and is not allowable.

But In the case of CIT VS INSTITUTE OF BANKING (2003) 264 ITR 110 (BOM), It has been held that there is no bar to claim depreciation even where the entire cost of the asset was already claimed as deduction u/s 11.

Can anyone suggest me whether Trust can claim depreciation with case law?

Replies (1)

CA Tarkeshwar

job

77 Points Posted on 09 December 2010

dear friend

It is absolutly correct that depreciation can be claimed as deduction while computing real income (actual receipt) of trust even where the entire cost of the asset was already claimed as deduction u/s 11. But Sorry I don't know the case law, wait for response from other member

I think the logic behind claiming deduction of depreciation is to reduce the "income from property held by charitable trust" (real income) so as to apply or accumulate the said reduce part of income to clain exemption U/s 11. depreciation is allowed for deduction because it has been already applied for charitable purpose but could not claim deduction as the same is not fully charged to profit or loss statement,

please anyone confirm the logic or clarify the same