Depreciation should be reduced from the income for determining percentage of funds which had to be applied for the purposes of the Trust

ADIT (E) Vs International Goudiya Vedanta  Trust (ITAT Delhi)- The Hon’ble Punjab & Haryana High Court in the case of CIT vs Tiny Tots Education Society (supra) has held that the income of the assessee, being exempt, the assessee was only claiming that depreciation should be reduced from the income for determining percentage of funds which had to be applied for the purposes of the Trust and as such, it could not be held that double benefit was given in allowing the claim for depreciation for computing the income for purposes of Section 11 of the Act. Respectfully following the aforesaid decision of Hon’ble Punjab & Haryana High Court, we uphold the order of ld. CIT(A) and direct the AO to allow depreciation and reduce the same from the income of the trust for determining the percentage of funds which had to be applied for the purposes of the Trust. The order of the ld. CIT(A) is thus upheld.

O R D E R

PER C. L. SETHI, J.M.

The only ground raised by the revenue in this appeal, directed against the order dated 11.4.2011 passed by the learned CIT(A) for Asstt. Year 2008-09, is as under:-

“On the facts and in the circumstances of the case, the ld. CIT(A) has erred in allowing depreciation which the AO had added back to the tune of  Rs. 31,03,118/- as the same was already allowed as application of income under the head Capital Expenditure”.

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