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2016 (12) TMI 301 - AT - Income TaxDenial of 15% deduction out of total fund available with the assessee for application under section 11(1) - Held that:- In the case of Karnal Improvement Trust [2011 (10) TMI 193 - ITAT DELHI], the Tribunal has not emphased that 85% of the total income should be applied on the objects of the trust only, then 15% will be available. The proposition laid down by the Tribunal is that if no income was applied by the trust for its objects under section 11(1) and no amount was applied for accumulation under section 11(2), then 15% deduction cannot be claimed as standard deduction. Similarly, if one looks into the proposition no.2 laid down by the Hon’ble Supreme Court in the case of ACIT Vs. ALN Rao Charitable Trust [1995 (10) TMI 2 - SUPREME Court], then it would be clear that the assessee will be entitled for exemption qua the income which has been applied for its objects, plus 15% of the total income. The ld.CIT(A) has failed to construe these two proposition while denying the exemption to the assessee. Therefore, I allow the appeal of the assessee and set aside the impugned order of the ld.CIT(A) and direct the AO to grant deduction of ₹ 1,75,804/- being 15% of ₹ 11,11,185/- i.e. income derived by the assessee form the trust-property. - Decided in favour of assessee
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