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TMI Blog2019 (10) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in [2018] 402 ITR 441 (SC), in which the Hon'ble Supreme Court has held that the assessee Trust is entitled to depreciation on the assets acquired by the expenditure incurred for acquisition of the assets by way of application of income for charitable purposes under Section 11(1)(a) of the Income Tax Act, 1961. The relevant portion of said Supreme Court judgment is quoted below for ready reference: "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 (her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of which has been fully allowed as application of income under section 11 in the past years? In the case of CIT v. Munisuvrat Jain 1994 Tax Law Reporter, 1084 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 Commissioner of Income Tax, Pune. The assessee derived income from the temple property which was a Trust property. During the course of assessment proceedings for assessment years 1977-78, 1978-79 and 1979-80, the assessee claimed depreciation on the value of the building @2½% and they also claimed depreciation on furniture @ 5%. The question which arose before the Court for determination was : whether depreciation could be denie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation. It was held that income of a Charitable Trust derived form 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, section 32 of the Income Tax 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 section 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of the Trust. In view of the aforesatated judgment of the Bombay High Curt, we answ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swered in the Affirmative i.e., in favour of the assessee and against the Department.' 2. After hearing learned counsel for the parties, we are of the opinion that the aforesaid view taken by the Bombay High Court correctly states the principles of law and there is no need to interfere with the same. 3. It may be mentioned that most of the High Courts have taken the aforesaid view with 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 '. 4. It may also be mentioned at this stage that the legislature, realising that there was no specific provision in this behalf in the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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