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2017 (12) TMI 1321 - AT - Income TaxExemption u/s 11 - claim of depreciation in respect of asset which is used in charitable activity - Held that:- The assessee is not eligible for depreciation when the cost of asset was allowed as application of income. Income from leasing of medical equipments - exemption under Section 11 denied - Held that:- The assessee-trust is admittedly registered as charitable institution under Section 12AA of the Act. The assessee-trust is providing medical relief to the poor. In order to carry out its object of providing medical relief to the poor, the assessee-trust procured certain medical equipments. After using the same for 2-3 years, the unused equipments, which are kept idle, were leased out to another hospital in which the trustee is a Director. The question now arises for consideration is when the assessee-trust leased out the medical equipments, which were kept idle, and received lease rentals, whether the activity of the assessee would amount to advancement of object of general public utility? This Tribunal is of the considered opinion that when the assessee-trust instead of keeping medical equipments idle, leased out the same and utilised the lease amount for charitable activity, it cannot be said that the assessee was carrying on business activity. Therefore, it cannot be said that the activity of the assessee amounts to advancement of any other object of public utility. In this case, the lease amount was again applied back for providing medical relief to the poor. Therefore, this Tribunal is of the considered opinion that leasing of medical equipments in the course of carrying on charitable activity is incidental to the main activity of providing medical relief to the poor. Hence, this Tribunal is unable to uphold the orders of the authorities below. Accordingly, the orders of the authorities below are set aside and the Assessing Officer is directed to allow exemption under Section 11 of the Act of the income which is applied for charitable activity.
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