Case Law Details
Janaseva Trust Vs ITO (ITAT Bangalore)
The case of Janaseva Trust Vs ITO, heard by ITAT Bangalore, brings into the limelight the pivotal issue of depreciation on fixed assets, and the intriguing scenario of potential double deduction.
Grounds of Appeal Analyzed
1. Depreciation Dispute: The core contention was around the disallowed claim of Depreciation at Rs.31,97,283. The AO believed that allowing depreciation would result in a double deduction as the application of income was already claimed during the asset purchase year. However, the ITAT referred to the Supreme Court’s judgment in CIT v. Rajasthan & Gujarati Charitable Foundation, Poona, [2018], which stated that an entity could claim both depreciation and application of income on the asset in its purchase year. This ground was allowed in favor of the assessee.
2. Corpus Fund Controversy: A total of Rs.1,05,92,266 was under contention, where the respondent treated it as general receipt instead of building corpus fund. Since the assessee did not present its case effectively before the CIT(A), ITAT has remanded this issue back to CIT(A) for reconsideration.
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