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2018 (8) TMI 2071 - ITAT BANGALOREExemption u/s 11 - receipts of the assessee as deployed in FDs - accumulation of unutilized income u/s.11(2) - assessee submitted that the maturity proceeds of the FDs go to the SB Account and monies are spent for charitable purpose from the SB account - HELD THAT:- The entire discussion in the order of assessment is academic for the present AY 2012-13 because ultimately there is no tax implication in AY 2012-13. If the stand of the Assessee is accepted, the Assessee will get one more year to apply the accumulated income of AY 2012-13. If the stand of the revenue is accepted, the Assessee will have to spend the accumulation of AY 2011-12 within the period allowed in law and period of one year will lapse without application thereby leaving a shorter period for application of accumulation of AY 2011-12. The accumulation of unutilized income of AY 2011-12 u/s.11(2) of the Act as well as the income of AY 2012-13 are deployed in the form of fixed deposits in bank accounts. The fixed deposits as and when they mature are again renewed and reinvested in fixed deposits. Therefore, the identification of funds of the Assessee as identifiable to accumulation of unutilized income of AY 2011-12 or that of receipt as income of AY 2012-13 is not possible in the present case. In such circumstances, we are of the view that the plea of the Assessee ought to have been accepted by the CIT(A). The provisions require that the income earned from the property held under trust must be first applied to the objects of the trust and if any income is remaining then accumulation to the extent of 15% of such income is permitted and if the total income could not be utilised towards the objects of the trust then the assessee can resort to further accumulation u/s. 11(2) over and above the amount of 15%. The CIT(A) has used the word “first” in his order whereas the expression “first” is not found in Sec.11(1)(a) or Sec.11(2) of the Act. If the sum of ₹ 1,89,01,520 spent for charitable purpose in AY 2012-13 is reduced from ₹ 7,88,84,408 the resultant figure of ₹ 5,99,82,888/- which would be the deficit in applying 85% of the total income of AY 2012-13 u/s.11(2) of the Act. 15% of the receipts of AY 2012-13 of ₹ 9,28,05,186 which can be accumulated as a matter of right would be a sum of ₹ 1,39,20,778. The above claim of the Assessee for accumulation is in order in the given facts and circumstances of the case where the identity of the monies as accumulation of AY 2011- 12 or the income of AY 2012-13 is not possible. We therefore direct the AO to accept the claim of the Assessee as made by the Assessee. - Decided in favour of assessee.
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