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2020 (10) TMI 984 - AT - Income TaxExemption u/s.11(1)(a) - Disallowance of Administrative & Establishment expenses claimed by the assessee - HELD THAT:- Assessee enjoys registration under section 12A of the Act and that the AO without assigning any reason has disallowed which was claimed by the assessee as Administrative & Establishment expenses which was included in the application of income u/s.11 Whether the administrative and establishment expenses can be included as application of Fund is no longer res integra, since Hon’ble jurisdictional High Court in CIT Vs. Birla Janahit Trust [1990 (8) TMI 5 - CALCUTTA HIGH COURT] has held that salaries and miscellaneous expenses which are incurred for carrying out the object and purpose of the trust must be considered as application for charitable purpose. Audit fee is necessary expense likewise bank charges, which assessee has to pay to the bank for running of its activities, and the expenses under the head ‘rates and taxes’ are in the nature of municipal taxes etc. which are necessary for the survival and then only it can run the trust, thereby achieve the objective of the trust, so the expenditure incurred by the assessee trust, needs to be allowed. Therefore, the total expenses incurred as Administrative & Establishment expenses are allowable expenses. Allowability of exemption u/s. 11(1)(a) (i.e. 15% accumulation of income is on Gross Receipt or not) - As per assessee, it is entitled to accumulate 15% of its gross receipt in case it is not applied for charitable purpose u/s. 11(1)(a) - HELD THAT:- the issue under consideration in respect of accumulation of income allowed u/s. 11(1)(a) of the Act is no longer res integra. For that, we rely on the decision of the coordinate bench of this tribunal (Bangalore bench) in the case of Greenwood High Trust [2018 (1) TMI 1105 - ITAT BANGALORE] we direct the AO to allow accumulation income u/s. 11(1)(a) of the Act @ 15% of the gross receipt as claimed by the assessee and consequently ground raised by the assessee is allowed.
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