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Issues involved: Appeal u/s 260-A of the Income Tax Act challenging the order of the Income Tax Appellate Tribunal regarding carrying forward excess expenditure over income to subsequent years in the case of a trust registered under the Societies Registration Act for advancement of science and technology.
Summary: 1. The appellant-Revenue filed an appeal u/s 260-A of the Income Tax Act challenging the order of the Income Tax Appellate Tribunal regarding allowing the assessee to carry forward excess expenditure over income to subsequent years. The Tribunal followed a decision of the High Court which stated that income derived from property held under trust for charitable purposes can be applied in subsequent years for charitable purposes. The Court held that adjusting expenses incurred for charitable purposes in an earlier year against income earned in a subsequent year qualifies as application of income for charitable purposes. The Delhi High Court also decided a similar issue in a judgment. The Court found no reason to interfere with the Tribunal's decision and dismissed the appeal. 2. The assessee, a trust registered under the Societies Registration Act for advancement of science and technology, had its assessment completed for the Assessment Year 2006-07 with a total income of &8377;6,04,34,990. The grant received from the Government of Gujarat was allowed to be carried forward and set off against income of the succeeding year by the CIT(Appeals). 3. The Revenue challenged the CIT(Appeals) order before the Tribunal, which followed a decision of the High Court and allowed the carrying forward of excess expenditure over income to subsequent years. The Tribunal's decision was based on the principle that income applied for charitable purposes in subsequent years qualifies as application of income for charitable purposes. 4. The Court, after considering the arguments presented by the Revenue, found no reason to interfere with the Tribunal's decision. The Court noted that the issue had been conclusively decided by the High Court and that no new material was presented to warrant a different decision. Therefore, the Tax Appeal was dismissed with no costs.
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