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TRUST U/S 12AA

11 October 2018

a trust which runs a hospital and in question depreciation is given so should i substract the depreciation from income of hospital or not?

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5 Replies

Sundararajan S (Final Student of ICAI) (1764 Points)
Replied 11 October 2018

In case of trust, both revenue and capital expenditure applied for objects of trust are allowed as deduction in the year in which they are purchased itself. So to my knowledge there's no question of deduction on Account of depreciation as capital expenditure is already deducted in year of purchase.

Rohan Bagra (406 Points)
Replied 11 October 2018

in a question depreciation was given and it was deducted from revenue.

but i think it is wrong

as asset acquired for the purpose of trust is treated as application of income and therefore whole amount of the asset is allowed

Hitesh (Student) (3549 Points)
Replied 11 October 2018

Trust can either claim depreciation or treat cost of asset as application. In the question your referring does the answer treat the cost of asset as application?

Rohan Bagra (406 Points)
Replied 11 October 2018

it is not specified. in question only depreciation is given.

can we assume that asset amount was taken as application so we don't treat depreciation.