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2018 (9) TMI 1968 - AT - Income TaxExemption u/s 11 - corpus donations/funds receipts - as per assessee utilisation of the corpus donations/funds could not be construed as the “Income derived from property” held under trust wholly for charitable or religious purposes, hence the application of the same could not be brought within the sweep of Sec. 11(1)(a) - whether, the CIT(A) was right in law and facts of the case in allowing the carry forward of the deficit of earlier years, for being set off against the surplus of subsequent years of the assessee trust ? - HELD THAT:- This issue involved in the case before us is squarely covered by the judgment of CIT Vs. Institute of Banking [2003 (7) TMI 52 - BOMBAY HIGH COURT] while dismissing the appeal of the revenue had observed, that as the income of the trust was to be computed on commercial principles, thus adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years, against the income earned by the trust in the subsequent year, was to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year. Hon‟ble High Court had in unequivocal terms observed, that the adjustment of the expenses incurred by the trust in the earlier years, against the surplus of the subsequent year, will have to be excluded from the income of the trust under Sec. 11(1)(a). Similar view had been taken in the case of CIT(Exemption) Vs. Subros Educational Society [2018 (4) TMI 1622 - SC ORDER] dismissed the appeal of the revenue and had declined to dislodge the observations of the High Court, that the excess expenditure incurred by the charitable trust/charitable institution in an earlier assessment year were to be allowed to be set off against the income of subsequent years by invoking Sec. 11 of the Act. - Decided in favour of assessee.
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