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TMI Blog2013 (7) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... SUPREME COURT OF INDIA] and Surat City Gymkhana [2008 (4) TMI 16 - SUPREME COURT] - In favour of assessee. Claim of depreciation - AO held that the provisions of section 11 provided for deduction on expenditure incurred for objects of the trust and the deduction of depreciation on capital assets would amount to double deduction thus disallowed - Held that:- As decided in case of Institute of Banking Personal Selection, Bombay [2003 (7) TMI 52 - BOMBAY High Court] in case of trusts, so called double deductions are allowable. Income of a charitable trust derived from building, plant and machinery and furniture was liable to be computed in normal commercial manner although the trust may not be carrying on any business and the assets in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst ground of appeal is about deletion of addition made by the AO under the head donation amounting to ₹ 30.5 lakhs. During the assessment proceedings AO found that assessee had received donation amounting to ₹ 30,50,000/-. He directed the assessee to file explanation in this regard. After considering the reply of the assessee he held that trust was taking donations for giving admissions in the school, that it amounted to selling of education, that assessee was not entitled to benefits of exemption u/s.11 of the Act, that assessee was not carrying charitable activities. Relying on the case of Vodithala Education Trust Society (20 SOT 353) he denied the trust benefits of section11 of the Act. 2.1. Assessee preferred an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haritable activity. If income earned by a trust is utilised for charitable purposes it cannot be held that trust is carrying out business. FAA has rightly pointed out that there is no evidence on record that profit earned by the assessee-trust were not utilised by it for non charitable purposes. It is also a fact that there is no instances of violation of provisions of sections 11-13 of the Act by the trust. In our opinion principles enumerated by the Hon'ble Supreme Court in the cases of Gujarat Maritime Board and Surat City Gymkhana are applicable to the case under consideration. Therefore, we are of the opinion that assessee-trust was carrying out charitable activities and was entitled to exemption. Therefore, confirming the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Institute of Banking Personal Selection (supra), it was held by the Hon'ble High Court that in case of trusts, so called double deductions are allowable. We would like to quote a portion of the said judgment:- ..... the first question which requires consideration by this Court is : whether depreciation was allowable on the assets, the cost of which has been fully allowed as application of income under s.11 in the past years? In the case of CIT vs. Munisuvrat Jain (1994) Tax LR 1084 (Bom) the facts were as follows. The assessee was a charitable trust. It was registered as a public charitable trust. It was also registered with the CIT, Pune. The assessee derived income from the temple property which was a trust property. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal income of the assessee on general principles or under s. 11(1)(a) of the IT Act. The Court rejected the argument on behalf of the Revenue that s. 32 of the IT Act was the only section granting benefit of deduction on account of depreciation. It was held that income of a charitable trust derived from building, plant and machinery and furniture was liable to be computed in normal commercial manner although the trust may not be carrying on any business and the assets in respect whereof depreciation is claimed may not be business assets. In all such cases, s. 32 of the IT Act providing for depreciation for computation of income derived from business or profession is not applicable. However, the income of the trust is required to be computed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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