You claim the tuition credit, not because you paid the tuition, but because she is your dependent. For example, had she paid the tuition herself or had it paid by student loans, you would still claim the tuition credit because she is your dependent.
In fact, it is not optional. If she qualifies as your dependent, she is, generally, not allowed to claim the credit on her return
This assumes the tuition in box 1 of the 1098-T is a larger amount than the scholarships in box 5
