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TMI Blog2018 (7) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s integra in light of the decision of Hon'ble Supreme Court in case of Commissioner of Income Tax-III, Pune vs. Rajasthan & Gujarati Charitable Foundation Poona wherein the Hon'ble Supreme Court has held as under:- "1. These are the petitions and appeals filed by the Income Tax Department against the orders passed by various High Courts granting benefit of depreciation on the assets acquired by the respondents-assessees. It is a matter of record that all the assessees are charitable institutions registered under Section 12A of the Income Tax Act (hereinafter referred to as 'Act'). For this reason, in the previous year to the year with which we are concerned and in which year the depreciation was claimed, the entire expenditure inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the course of assessment proceedings for asst. yrs. 1977-78, 1978-79 and 1979-80, the assessee claimed depreciation on the value of the building @ 2-1/2 per cent and they also claimed depreciation on furniture @ 5 per cent. The question which arose before the Court for determination was : whether depreciation could be denied to the assessee, as expenditure on acquisition of the assets had been treated as application of income in the year of acquisition? It was held by the Bombay High Court that s. 11 of the IT Act makes provision in respect of computation of income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 under s. 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the trust. In view of the aforestated judgment of the Bombay High Court, we answer question No. 1 in the affirmative i.e., in favour of the assessee and against the Department. 4. Question No. 2 herein is identical to the question which was raised before the Bombay High Court in the case of Director of Income-tax (Exemption) vs. Framjee Cawasjee Institute (1993) 109 CTR 463 (Bom). In that case, the facts were as follows : The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h only exception thereto by the High Court of Kerala which has taken a contrary view in 'Lissie Medical Institutions v. Commissioner of Income Tax'.[2012] 24 taxmann.com 9/209 Taxman 19 (Mag.)/348 ITR 344 (Ker.) 4. It may also be mentioned at this stage that the legislature, realising that there was no specific provision in this behalf in the Income Tax Act, has made amendment in Section 11(6) of the Act vide Finance Act No. 2/2014 which became effective from the Assessment Year 2015-2016. The Delhi High Court has taken the view and rightly so, that the said amendment is prospective in nature." 6. In the instant case, the provisions of section 11(6) are not applicable as the same will be applicable from AY 2015-16. For the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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