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Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of - Assessment year 2005-06 - Claim of depreciation by a charitable institution, whose income is fully exempt, does not amount to taking of double benefit by such charitable institution [In favour of assessee] The assessee was registered under section 12AA as charitable trust. The Assessing Officer disallowed the depreciation calculated as per the statutory provisions on the ground that since income of the assessee was exempt from tax under sections 11 to 13 allowing depreciation to ascertain whether 85 per cent of funds were applied for purposes of trust, would amount to conferring double benefit. Held that the assessee was not claiming double deduction on account of depreciation as had been suggested by the revenue. The income of the assessee being exempt, the assessee was only claiming that depreciation should be reduced from the income for determining the percentage of funds which had to be applied for the purposes of the trust. There was no double deduction claimed by the assessee as canvassed by the revenue. It could not be held that double benefit was given in allowing claim for depreciation for computing income for purposes of section 11. CASE REVIEW CIT v. Raipur Pallottine Society [1989] 180 ITR 579 (MP); CIT v. Rao Bahadur Calavala Cunnan Chetty Charities[1982] 135 ITR 485 (Mad); CIT v. Seth Manilal Ranchhoddas Vishram Bhawan Trust [1992] 198 ITR 598 (Guj.); CIT v.Society of the Sisters of St. Anne [1984] 146 ITR 28 (Kar.); CIT v. Institute of Banking [2003] 264 ITR 110 (Bom) relied on. Escorts Ltd. v. UOI [1993] 199 ITR 43 (SC) distinguished. CASES REFERRED TO Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC), CIT v. Institute of Banking [2003] 264 ITR 110 (Bom.), CIT v. Raipur Pallottine Society [1989] 180 ITR 579 (MP), CIT v. Rao Bahadur Calavala Cunnan Chetty Charities [1982] 135 ITR 485 (Mad.), CIT v. Sheth Manilal Ranchhoddas Vishram Bhavan Trust [1992] 198 ITR 598(Guj.), CIT v. Society of the Sisters of St. Anne [1984] 146 ITR 28 (Kar.) and Escorts Ltd. v. UOI [1993] 199 ITR 43(SC). Yogesh Putney for the Appellant. Rajesh Garg for the Respondent.…

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