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TMI Blog2011 (7) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... meeting the expenditure of the earlier year would not amount to such income being applied for charitable or religious purposes - In the case of CIT v. Maharana of Mewar Charitable Foundation [1986 (7) TMI 56 - RAJASTHAN High Court]- Decided in favor of the assessee - IT APPEAL NO. 21 OF 2011 - - - Dated:- 8-7-2011 - SHANTANU KEMKAR AND S.C. SHARMA, JJ. Veena Mandlik for the Appellant. ORDER Shantanu Kemkar, J. This order shall govern disposal of ITA Nos. 22 and 23 of 2011 as common questions of law are involved in all these appeals and they arise out of the common order. 2. All these appeals under section 260-A of the Income Tax Act, 1961 (for short, the Act) are against the order dated 31.01.2011 passed by the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal. 6. We find that the question, whether a charitable trust is entitled to depreciation under section 32 of the Act in respect of assets owned by it, was dealt with by a division Bench of this Court in CIT v. Raipur Pallottine Society [1989] 180 ITR 579/[1990] 50 Taxman 233 (MP) by placing reliance on a Division Bench Judgment of Karnataka High Court in CIT v. Society of the Sisters of St. Anne [1984] 146 ITR 28/16 Taxman 400 and has held that depreciation is nothing but decrease in value of property through wear, deterioration or obsolescence and allowance is made for this purpose in book keeping, accountancy, etc. It is the exhaustion of the effective life of a fixed asset owning to 'use' or obsolescence. It may be computed as that pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be met out of the income of the subsequent year and utilization of such income for meeting the expenditure of the earlier year would not amount to such income being applied for charitable or religious purposes. Having regard to Section 11(1)(a) of the Act in our view when the income of the trust is used or put to use to meet the charitable or religious purposes it is applied for charitable purpose and the said application of the income for charitable or religious purposes takes place in the year in which the income is adjusted to meet the expenses incurred for charitable or religious purposes. Thus even if the expenses for charitable and religious purposes have been incurred in the earlier year and the said expenses arc adjusted against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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