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2019 (2) TMI 291 - AT - Income TaxRevision u/s 263 - exemption u/s 11 denied - utilization of corpus donations in violation of proviso to section 11(1)(d) - charitable activity - Held that:- Provisions of section 11(1)(d) in no way have been violated by the assessee. There has been excess of expenditure over income for the year under consideration and the same has been carried forward to the general fund in the balance sheet accumulated over the years whereas Corpus donations are separately appearing in balance sheet. (Page 1 to 12 of the paper book filed by the assessee). Therefore, the observations of the ld. CIT that the deficit for the year has been met out of the corpus donation, is not correct as is evident from the final accounts. Although no such adjustment has been made by the assessee, however there is no bar on such adjustment as per the provisions of section 11(1)(d) or u/s 12(1). The assessee is also entitled to carry forward the deficit for the year and set off the same in the next year(s), in the view of dictum laid down in CIT (E) Vs. Subros Educational Society [2018 (4) TMI 1622 - SUPREME COURT OF INDIA]. Therefore, when carry forward of deficit is allowed, it implies that the said excess utilization has been spent out from sources other than the voluntary contributions received during the year and should be out of Corpus only. For the aforesaid reasons and the judicial precedents cited supra, we are of the view that the CIT order passed u/s 263 of the I.T.Act is without jurisdiction and we quash the same. - Decided in favour of assessee.
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