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2020 (1) TMI 967 - AT - Income TaxExemption u/s 11 - disallowance of amount utilized for acquisition of assets as application of income u/s 11 - disallowance of claim of repayment of loan as application of income u/s 11 - HELD THAT:- As submitted that the nexus of loan funds and utilization should be examined to find out exact position. Accordingly, the Ld Counsels submitted that the assessee may be provided with an opportunity to furnish the details of utilization of loans, so that the correct amount of application of income could be quantified in terms of the ratio laid down in the above said decision. D.R also agreed to the plea put forth by the Ld counsels for the assessees. Accordingly, we set aside the orders passed by Ld CIT(A) in respect of above said two issues in all the years and restore them to the file of the AO with the direction to examine these issues afresh in the light of above said decision of the Tribunal by duly considering the information provided by the assessee with regard to utilization of loan funds. The assessee should be provided with adequate opportunity of being heard. Rejection of claim of carry forward of current year’s deficit (excess amount of application of income) to subsequent years and also claim of depreciation on assets - HELD THAT:- The issue of carry forward of deficit amount is consequential to the earlier two issues. Since the assessing officer has disallowed claim of “application of income” in respect of assets purchase out of loan funds and also repayment of loans, the income came to be assessed in positive figure. Hence there was no requirement of holding that the deficit shall be carried forward. Since the earlier two issues have been restored to the file of the assessing officer, this issue shall be dependent upon the result of the consequential order that may be passed by the AO. Accordingly, this issue is also restored to his file with the direction to allow carry forward of deficit, if any, computed in any of the years. The AO is also directed to allow claim of depreciation after examining the same upto assessment year 2014-15, since the provisions of sec.11(6) debars claim of depreciation on the assets, which have been allowed as application of income. Manner of computation of income u/s 11and carry forward of excess amount of application - HELD THAT:- Both the parties agreed that the issues urged by the revenue are covered against the revenue by the decision rendered by Hon'ble Supreme Court in the case of CIT vs. Rajasthan & Gujarati Charitable Foundation [2017 (12) TMI 1067 - SUPREME COURT] . Accordingly, we dismiss the grounds urged by the revenue in all the three years.
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