9911796707
TMI Blog2021 (7) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... The court further observed that once the assessee is allowed depreciation, it shall be entitled to carry forward depreciation as well. The Hon ble Karnataka High Court in the case of Pr.CIT (Exemptions) vs. Shushrutha Educational Trust [ 2018 (12) TMI 329 - KARNATAKA HIGH COURT , had considered an identical issue and by following the decision of the Hon ble Supreme Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation held that charitable institutions are entitled to depreciation on assets whose cost has been allowed as application of income. The court further noted that excess application of income for charitable purpose can be carry forward to subsequent years and further set-off against income of the trust in the subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application of income u/s 11 and depreciation claimed u/s 32 are two different issues in the case of charitable trust and cannot be treated as double deduction. 6. The CIT (Appeals) is not justified in ignoring the contention of the appellant that the trust should be allowed the adjustment of excess amount spent towards charitable purposes in the earlier years against current income to determine the funds available with the appellant trust for the purpose of section 11(1) of the act and confirming the decision of the assessing officer in not allowing the setting off of the excess application / unabsorbed depreciation of earlier years against the income determined in the current assessment year. 7. For these and other reasons that may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no provision under the Act, to carry forward and set off of excess expenditure in case of trusts, like carry forward and set off business loss in other cases. The assessee carried the matter in appeal before the first appellate authority, but could not succeed. 4. The CIT(A) for the reasons stated in his appellate order and also by following decision of the ITAT, Chennai in assessee's own case for assessment year 2009-10, confirmed additions made by the AO towards disallowance of depreciation on fixed assets and carry forward of excess application of income by holding that the assessee did not claim or did not bring any material on record to establish that it has carried out business in the relevant assessment year and further, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arely covered in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court of Madras in the case of DIT vs. Medical Trust of the Seventh Day Adventist, supra, however, he strongly supported order of the ld.CIT(A). 7. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. Admittedly, the issue of depreciation on asset, whose cost has been allowed as application of income to charitable purpose u/s.11(1)(a) of the Act, and carry forward of excess application of income to subsequent years and set off against income of the trust is decided against the assessee by the Tribunal in assessee's own case for assessment year 2009-10. But, fact remains that, while d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s.11(1)(a) of the Act, has to be allowed while computing income of the trust. The Hon'ble Supreme Court further held that the trust is entitled to carry forward excess application of income for charitable purpose to subsequent years and set off against income of the trust. This proposition is further supported by the decision of Hon'ble Supreme Court in the case of CIT v. Rajasthan and Gujarati Charitable Foundation, supra, where the Hon'ble Supreme Court after considering the amendment in section 11(6) of the Act, by the Finance Act, 2014 held that the assessee is entitled to depreciation u/s. 32 of the Act on assets whose cost has been allowed as application to charitable purpose. The court further observed that once the assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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