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2013 (4) TMI 897 - AT - Income TaxExemption for Trusts - Statutory Accumulation of Income u/s 11 (1)(a) - To be computed on Gross inocme or net income - Assessee was a religious and charitable trust and had total income of ₹ 35,60,82,101/- against which it had applied income amounting to ₹ 58,09,87,048/-. A.O. computed the assessment at nil income as application of income including the capital expenditure was more than the income earned. Assessee contended before CIT (A) that AO had not allowed the statutory accumulation of 25% of the gross income which was required to be carried forward for application in the subsequent year u/s 11(1)(a). - HELD THAT:- Under the provisions of section 11(1) (a), the assessee is entitled to accumulate 25% of the income and therefore even if the assessee had spent only 75% of the income, the entire income would be exempted. But in this case, there was no income left that could be accumulated. In fact, there was deficit, therefore, the claim of the assessee is rejected.
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