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2016 (8) TMI 80 - AT - Income TaxEntitlement to exemption u/s 11 - activities carried on by the assessee in the form of running of community hall, "Suguna Auditorium Hall" - treatment of income earned from auditorium as business income instead of treating the same as income exempted u/s.11 of the Act - Held that:- We fail to see any connection between the activities relating to running of "Suguna Auditorium Hall" was carried on and the attainment of the objects of the trust. The mere fact that whole or some part of the income from running of "Suguna Auditorium Hall" is used for charitable purposes would not render the business itself being considered as incidental to the attainment of the objects. We are in agreement with the Department that the application of income generated by the business is not relevant consideration and what is relevant is whether the activity is so inextricably connected or linked with the objects of the trust that it could be considered as incidental to those objectives. Being so, we are inclined to hold that the assessee is not entitled for any exemption u/s. 11 of the I.T. Act. Further, the assessee is not entitled for depreciation on the opening balance of written down value of the assets in the asst. year under consideration, which were purchased in earlier years and the cost of those assets have already considered as application of income in earlier asst. year while granting exemption u/s.11 of the Act. - Decided against assessee
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