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2022 (11) TMI 190 - ITAT KOLKATARevision u/s 263 - Exemption u/s 11 - Assessment of trust - application of current year’s income - CIT ( E ) has alleged that the assessee has wrongly claimed expenditure out of the accumulation fund, the claim of which has already been allowed to the assessee in the past - HELD THAT:- To examine the correctness of this observation, we, on perusal of the audited financial statement notice that in the receipt and payment the assessee has shown application of accumulated fund during the year at Rs. 53,52,500/-. In the income and expenditure account two amounts have been shown as expenditure towards building renovation & construction & purchase of assets. Now we would like to examine the application of accumulated fund. We find that the assessee in the balance sheet under SCHEDULE-B has reduced the said sum from opening balance of accumulated fund. We find that the assessee trust furnished details of each and every amount forming part of total amount - The sum which the ld. CIT ( E ) mentioned in the show cause notice issued u/s. 263 of the Act, is also part of the list of amount spent - On perusal of the details show that the assessee has accumulated the fund in the past as per provisions of section 11(2) and has rightly applied the accumulated fund for the purpose it was meant for. On perusal of the financial statements clearly shows that the assessee has not claimed the alleged sum of Rs. 53,52, 501/- as application of income during the year. It seems that the ld. CIT ( E ) has inadvertently considered the figures of expenditure shown under the head ‘building renovation & construction & purchase of assets’ as part of sum of Rs.53,52,501/-, which in our considered view is not correct. We, therefore, under the given facts and circumstances of the case, are of the considered view that since the reason for which the jurisdiction u/s. 263 of the Act has been invoked/initiated/assumed does not have legs to stand and the facts of the case clearly indicate that the assessee has not claimed the alleged sum of Rs.53,52,501/- towards application of current year’s income, we fail to find any merit in the finding of the ld. CIT ( E )’s order passed u/s.263 of the Act. Therefore, the same is hereby quashed. Accordingly, the assessment order dt. 02- 08-2018 framed u/s. 143(3) of the Act is restored. The grounds raised by the assessee are allowed.
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