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2019 (4) TMI 762 - ITAT MUMBAIExemption & application u/s 11 - Deductability of standard deduction u/s 24(a) against rental income in case of a trust/institution - standard deduction @30% vs actual expenditure - HELD THAT:- It is the settled position of law that once income of a trust / institution is computed under the provisions of section 11, whatever income derived from the property held under trust is to be taken into account and against which actual expenditure incurred for the objects of the trust has to be considered as application of income. Therefore, while arriving at income u/s 11, the AO needs to allow deduction towards actual repairs and maintenance expenses incurred for ₹ 13,00,635. Therefore, we direct the AO to allow deduction towards actual repairs and maintenance expenditure incurred before arriving at income available for accumulation u/s 11(2) / taxable income of the trust / institution. Computation of capital gain u/s 11(1)(a) in case of trust - deduction towards re-purchase of mutual funds purchased - HELD THAT:- The issue raised by the assessee in respect of deduction towards re-purchase of mutual funds purchased out of sale consideration received from sale of investments u/s 11(1)(a) is either not discussed by the AO in his assessment order nor emanating from the records furnished by the assessee before the lower authorities. Although, the assessee has disclosed profit on sale of investments in the P&L Account, other facts with regard to the re-investment on sale consideration for purchase of mutual funds is not clear. The assessee neither made any claim in the return of income filed for the year nor sought to include such claim by way of revised return or revised statement of total income before the AO. When there is no claim with regard to deduction towards re-investment u/s 11(1)(a), before the AO and also the facts with regard to the issue is not placed at the time of assessment proceedings, the Ld.CIT(A) had no option but to proceed on the basis of materials brought out by the AO during assessment proceedings. Accordingly, we find no infirmity in the finding recorded by the CIT(A) in dismissing ground taken by the assessee regarding deduction towards capital gain income derived from sale of investments u/s 11(1)(a). Accumulation of income u/s 11(2) - AO has allowed accumulation of income u/s 11(2) as per the details filed by the assessee alongwith form 10 - Revised accumulation - HELD THAT:- In this case, the facts with regard to the availability of funds for making investments are under dispute. The assessee failed to file any details with regard to the availability of funds for making investments in the modes specified u/s 11(5). Therefore, we are of the considered view that there is no merit in the argument of the assessee that it has accumulated income u/s 11(2) of the Act, for the purpose of object of the trust in compliance with provisions of section 11(5). Therefore, we reject the ground taken by the assessee. - Decided against assessee.
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