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2022 (8) TMI 588 - HC - Income TaxAssessment of trust - benefit of the deficit for earlier years against the income of subsequent year - whether Tribunal has erred in allowing deficit resulting out of Corpus Donations without appreciating that this income has been claimed as exempt by the assessee? - HELD THAT:- We are of the opinion that the CIT (Appeals) as well as the Tribunal have arrived at concurrent findings of fact by applying the decision of this Court in case of Sheth Manilal Ranchhoddas Vishram Bhavan Trust [1992 (2) TMI 51 - GUJARAT HIGH COURT] and in case of Shri Plot Swetambar Murti Pujak Jain Mandal [1993 (11) TMI 17 - GUJARAT HIGH COURT] wherein it is held that, there is nothing in language of Section 11(1)(a) of the Act, 1961 to indicate that the income from the trust property should have been applied for charitable or religious purposes only in the year in which such income is received and the deficit incurred by the Trust due to excess spending on the object of the trust during the particular year or excess expenditure incurred in earlier years or in the current year by the trust cannot be permitted to be set off against the income of subsequent years. It was held in case of Sheth Manilal Ranchhoddas Vishram Bhavan Trust (Supra) that, ‘income’ referred to in Section 11(1)(a) of the Act, 1961 was to be computed in accordance with normal rules of the accounting. Hence, depreciation has rightly been allowed as expenditure in the facts of the case. The Tribunal, applying the aforesaid decisions of this Court, has held that the expenditure incurred in the earlier year can be set off from the income of the subsequent years and utilization of such income for meeting the expenditure of the earlier year would amount to such income being applied for charitable or religious purpose. This Court in case of Shri Plot Swetambar Murti Pujak Jain Mandal [1993 (11) TMI 17 - GUJARAT HIGH COURT] has held that the income derived from Trust property has to be computed on commercial principles and consequently deficit arising out of expenditure over income for the previous year can be set off against the surplus of income over expenditure of the subsequent year. Thus we are of the opinion that there is no error in the impugned orders passed by the Tribunal giving rise to any question of law, much less any substantial question of law, proposed or otherwise.
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