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2019 (8) TMI 1125 - AT - Income TaxBenefit of exemption u/s 11 - Charitable activity u/s 2(15) - Bengaluru METRO - on the basis of source of revenue derived from renting of space and advertisements the revenue authorities came to the conclusion that the assessee was not existing for charitable purpose - HELD THAT:- It can be seen from the various provisions of the RTC Act, 1950 which we have set out in the earlier part of the order that the dominant and prime objective of the Assessee is not profit making. Prior to the introduction of the proviso to Section 2(15), there was no dispute that the Assessee was established for charitable purposes. The stream of traffic revenue and non traffic revenue by itself would demonstrate that the Assessee does not exist for profit. Keeping in mind the above factual aspects and the provisions of the KIDA Act, and principle laid down in the aforesaid decision of India Promotion Organization [2015 (1) TMI 928 - DELHI HIGH COURT] will clearly show that the Assessee does not driven primarily by desire or motive to earn profits but to do charity through advancement of an object of general public utility. The proviso to Sec.2(15) is therefore not applicable to the case of the Assessee. We therefore hold that the Assessee is entitled to the benefits of Sec.11. The AO has not disputed the conditions necessary for allowing exemption u/s.11 of the Act, except the applicability of proviso to Sec.2(15). The said proviso is not applicable to the case of the Assessee, we hold that the Assessee's income is entitled to the benefits of Sec.11. In view of the above conclusion on the preliminary issue, the other grounds of appeal become academic and require no consideration. Allowance of depreciation when the cost has already been recovered by way of exemption as application of income - HELD THAT:- As decided in M/S. CUTCHI MEMON UNION [2013 (9) TMI 404 - ITAT BANGALORE] u/s. 11(1), income has to be computed in normal commercial manner and the amount of depreciation debited in the books is deductible while computing such income. The Hon’ble Supreme Court in the case of CIT Vs. Rajasthan & Gujarati Charitable Foundation Poona, [2017 (12) TMI 1067 - SUPREME COURT] has since confirmed the view that depreciation has to be allowed as a deduction even when the cost of acquisition of the depreciable asset has been treated as application of income in the year of its acquisition.
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