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2018 (11) TMI 597 - ITAT COCHINCharitable activities - Entitled to exemption u/s 11(1) - dominant object - Held that:- The Hon’ble Apex Court in the case of Addl. CIT v. Surat Art Silk Cloth Manufacturers Association [2006 (9) TMI 115 - SUPREME COURT] had held that if the dominant object is charitable then the incidental object for attainment of the dominant / primary object would also be charitable in nature. It was further held by the Hon’ble Apex Court that there is a very clear distinction between the object of a trust to carry on a business activity and the carrying on an activity of profit for achieving its objects. The Hon’ble Apex Court in the case of Thanthi Trust [2001 (1) TMI 80 - SUPREME COURT] had also held that the assessee is entitled to the assessment u/s 11 of the income derived from an activity incidental to the achievement of the objects of the trust. For these reasons, we hold that the assessee’s activities of running the hospital and the nursing school is intricately connected and dependent on each other and it is one inseparable activity and both are entitled to exemption u/s 11(1). Disallowance of depreciation - Held that:- We find that the recent judgment of the Hon’ble Apex Court in the case of CIT v. Rajasthan And Gujarati Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] had held in favour of the assessee by holding that the amendment brought about to section 11(6) is not retrospective in effect and is only prospective and applicable for and from 2015- 2016 onwards. Therefore going by the dictum laid down by the Hon’ble Apex Court in the case of CIT v. Rajasthan And Gujarati Charitable Foundation (supra), we hold that the assessee is entitled to depreciation on assets though the cost of the same was allowed as application.
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