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2019 (1) TMI 1997 - AT - Income TaxExemption u/s 11 - CIT-A justification in holding that the dividend income which is exempt u/s 10 of the Act need not be considered for the purpose of 85% application of income - HELD THAT:- Inclusion of dividend income (exempt) for the purpose of reckoning the 85% application of income is already settled in favour of the assessee in the case of DIT(E) vs Jasubhai Foundation [2015 (4) TMI 305 - BOMBAY HIGH COURT] held that when the income from property held for charitable or religious purpose is not a matter covered or dealt with by section 10 that the Tribunal's view cannot be termed as perverse or vitiated by any error or law apparent on the face of the record. The clear language of these provisions enables us to uphold the order of the Tribunal.Ground No. 1 raised by the revenue is dismissed. Allowability of depreciation on assets as an application of income - whether the CITA was justified in allowing the claim of depreciation on assets also as an application of income, eventhough the entire cost of fixed assets had already been claimed as application of income for the purpose of reckoning the limits of 85% application of income - HELD THAT:- As we find that the issue is now settled by the recent decision of CIT vs Rajasthan and Gujarati Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] held when the ITO stated that full expenditure had been allowed in the year of acquisition of the assets, what he really meant was that the amount spent on acquiring those assets had been treated as 'application of income' of the Trust in the year in which the income was spent in acquiring those assets. This did not mean that in computing income from those assets in subsequent years, depreciation in respect of those assets cannot be taken into account. - Decided against revenue.
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