Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (11) TMI 1270 - AT - Income TaxCarry forward of excess application over income - CIT (Appeals) is not justified in denying the claim of the assessee on the ground that there is no provision for carry forward of the deficit to be regarded as application of income in the subsequent assessment years - Held that:- The income of charitable trusts is required to be computed on commercial principles. The concept of application of the income for the year in which the income has arisen is not found in Section 11(1)(a) of the Act. No limitation to the above effect is found in the language of the section. It merely requires application of the income that has arisen from the property held under trust. In this view of the matter, the principles relating to set off of losses, etc. is not of any relevance and therefore any excess application of income during the year can be regarded as application of the income of future years and can be adjusted. Therefore, in our view, the claim of the assessee for carry forward of excess application is in accordance with the judicial precedents on the issue and the same is allowable. To satisfy the requirements of section 11(2)(b) of the Act, the investment must necessarily come out of current year’s income and the investment made in the past obviously cannot satisfy the requirements for the current year. We are, therefore, inclined to follow the view taken by the co-ordinate benches of this Tribunal, inter alia, in the case of Baldwin Methodist Educational Society (2015 (10) TMI 2416 - ITAT BANGALORE), based on the view/decisions of the Hon'ble Bombay High Court in the case of Institute of Banking (2003 (7) TMI 52 - BOMBAY High Court) and the Hon'ble Gujarat High Court in the case of CIT V Shri Plot Swetamber Murti Pujak Jain Mandal reported in [1993 (11) TMI 17 - GUJARAT High Court]. In this view of the matter, the Assessing Officer is directed to allow carry forward of the excess application for the year to be adjusted from income from property held under trust of the subsequent years. - Decided in favour of assessee.
|