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2016 (5) TMI 545 - ITAT CHENNAIEntitlement to exemption u/s. 11 - AO held that the business of running community hall, marriage hall and funeral ceremonies hall cannot be treated as incidental business eligible for exemption u/s 11(4A) - Held that:- Merely carrying on business for and on behalf of the trust and applying the profits of the same for the object of the trust does not entitle for exemption u/s. 11(4) of the Act unless the business is incidental to the attainment of the objects of the trust. We fail to see any connection between the activities relating to running of community hall, kalyanamandapam and funeral ceremony hall were 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 community hall, kalyanamandapam and funeral ceremony hall are 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.Thus the assessee is not entitled for any exemption u/s. 11 of the I.T. Act. - Decided against assessee Entitlement to depreciation - Held that:- 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. As decided in case of M/s. Kongunadu Arts & Science College Council [2015 (11) TMI 1119 - ITAT CHENNAI ] if the assessee claims exemption u/s 11 under Chapter III of the Act, it cannot claim depreciation u/s 32 of the Act. - Decided against assessee
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