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2019 (6) TMI 695 - AT - Income TaxExemption u/s 11 - contribution / donation to ADTA has been made without any prior agreement - HELD THAT:- Donations are never made with prior agreement and it is solely governed by the will and capabilities of the donor. It is also seen that no amount has been paid for the benefit of any person specified u/s. 13 (3) for which benefit of section 11 and 12 may be denied to the assessee. CBDT vide instruction No.1132 dated 05.01.1978 has held that the payment of a sum by one charitable trust to another for utilization by the donee trust towards its charitable objects is proper application of income for charitable purpose in the hands of the donee trust, and the donor trust will not lose exemption u/s 11 merely because the donee trust did not spent the donation during the year of receipt itself. The order of the CIT(A) upholding the action of the AO is not justified. Disallowance on account of EPF contribution of employees u/s 36(l)(va) rws 2(24)(x) - HELD THAT:- In view of the decision of Hon’ble Supreme court in the case of CIT Vs. Alom Extrusions [2009 (11) TMI 27 - SUPREME COURT] and various other decisions payments made prior to due date of filing of return as prescribed u/s. 139 (1) cannot be disallowed u/s. 36 (1) (va) r.w.s. 2 (24) (x). Since in the instant case admittedly the deposits towards EPF has been deposited prior to the due date of filing of return u/s. 139 (1) therefore, following the consistent view of the coordinate benches of the Tribunal no disallowance u/s. 36 (1) (va) r.w.s. 2 (24) (x) can be made. The ground raised by the assessee is accordingly allowed. Benefit of deemed application on account of interest accrued but not received under clause 2 of explanation to section 11 (1) - HELD THAT:- The amount of accrued interest of FDR is the income derived during the impugned assessment years but not received shall be treated as deemed to be applied. I find merit in the above arguments of the assessee. A perusal of the computation of income for the A.Y.2013-14 shows that the net surplus of ₹ 73,93,794/- includes the income of ₹ 2,81,769/- which has not actually been received. The assessee in its form No.10B in clause No.2 of annexure containing statement of particulars, has clearly mentioned that the assessee has exercised the option of clause 2 of the explanation to section 11 (1) according to which the amount of income is the income deemed to have been applied to charity/ religious purpose in India. Since the amount of interest accrued but not received is the deemed application of income under clause 2 of explanation to section 11 (1) the CIT(A) is not justified in denying the benefit of deemed application. The ground No. 4 raised by the assessee is accordingly allowed. Depreciation claim of assessee trust - HELD THAT:- Hon’ble Supreme Court in the case of CIT Vs. Rajasthan & Gujarati Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT] has held that income of trust was required to be computed u/s 11 on commercial principles after providing for allowance for normal depreciation and deduction thereof from gross income of trust. Since, the issue stands decided in favour of the assessee by the decision of Hon’ble Supreme Court cited (supra) therefore, ground No. 5 of appeal raised by the assessee and additional grounds raised by the assessee are allowed.
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