Recently, in DCIT(E) v. Shri Sudhir Madhavji Lall Welfare & Educational Trust, the Mumbai ITAT confirmed that depreciation claim of a trust is an allowable as application money which is deductible under section 11 of the Income Tax Act.
AO disallowed the assessee-Trust’s claim for depreciation on ground that it would amount to double deduction. On appeal, the first appellate authority allowed the claim of the appellant by relying upon the decisions of Bombay High Court in the cases of CIT Vs. Institute of Banking Personnel and Director of Income-tax (Exemptions), Mumbai v. Shri Vile Parle Kelavani Mandal. In both these cases, the Bombay High Court held that allowing the claim of depreciation as application money under section 11 of the Act would not amount to double deduction.
Dismissing the departmental appeal in view of the above two decisions of the jurisdictional High Court, the Single Member of the Tribunal concurred with the findings of the first appellate authority.
Read the full text of the Order below.
