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2016 (1) TMI 899 - AT - Income TaxApplication of income in the computation of total income of assessee u/s. 11 - whether the amount borrowed by assessee in the AY 2004-05 and used for repayment of "ways and means" during the relevant AY 2007-08 be treated as an application of income u/s. 11 of the Act or not? - Held that:- The board circular No.100 dated 24.01.1973 states that the repayment of loan originally taken to fulfill one of the objectives of the trust will amount to an application of the income for charitable purposes. In the present case the assessee is juridical entity created by act of parliament for the object of general public utility and was very much in existence prior to 1st April 2005. Once the object is of general public utility, which is charitable in nature, the assessee's case is covered by the decision of Hon'ble Supreme Court in the case of CIT V Gujarat Maritime Board, [2007 (12) TMI 7 - SUPREME COURT OF INDIA ]. Accordingly, we allow the claim of assessee in respect to repayment of 'ways and means loan', borrowed during assessment year 2004-05 and wholly and exclusively used for its objects, as an application of income in the computation of total income of assessee u/s. 11 of the Act. - Decided in favour of assessee.
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