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Issues involved: Interpretation of exemption u/s 11 of the Income Tax Act, 1961 based on charitable activities u/s 2(15) and consideration of deduction of depreciation.
Interpretation of exemption u/s 11: The revenue appealed against the acceptance of the assessee's claim of exemption u/s 11, arguing that the assessee did not engage in charitable activities as required u/s 2(15) of the Act. The Tribunal noted that the facts of the current year were similar to the previous year, where a relevant order had been passed. The Tribunal held that the order from the previous year should be followed for consistency, as the activities of the assessee had not changed. The Tribunal emphasized the importance of maintaining separate books of account for business activities to determine eligibility for deductions u/s 11. The matter was remanded to the Assessing Officer to ascertain facts regarding business income and maintenance of separate books of account. Consideration of deduction of depreciation: The issue of deduction of depreciation was raised by the assessee, claiming entitlement based on not writing off capital assets from its accounts as application of income. However, the AO did not address this issue in the assessment order. The Tribunal decided to remand the matter back to the AO for consideration of the depreciation claim and to make a fresh decision after hearing the assessee. Conclusion: The Tribunal treated the appeal as allowed for statistical purposes, indicating that further assessment and consideration were required on both the exemption u/s 11 and the deduction of depreciation. The Tribunal highlighted the need for maintaining separate books of account for business activities to determine eligibility for deductions, emphasizing the statutory provisions governing such matters.
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