Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (2) TMI 709 - AT - Income TaxExemption u/s 11 - Assessment of trust - assessee trust eligible for standard deduction at the rate of 30% u/s 24 (a) of the act, out of the rental income chargeable to tax in the hands of the assessee - HELD THAT:- The assessee has earned rental income of ₹ 978600/– and claimed deduction at the rate of 30% amounting to ₹ 293580/–. Assessee is a charitable trust and the computation of income is governed in the case of the assessee by the provisions of section 11, 12 and 13 of the income tax act. These provisions though provide for various types of income on by a charitable trust however, it has nothing to do with the matter of computation of total income as referred to in chapter IV of the act. This issue is squarely covered against the assessee by the decision of the coordinate bench in Nandlal Tolani Charitable vs ITO (E)-2(1), Mumbai [2019 (4) TMI 762 - ITAT MUMBAI] - No merit in this ground of appeal of the assessee. Accordingly we hold that assessee trust is not eligible for standard deduction at the rate of 30% u/s 24 (a) of the act, out of the rental income chargeable to tax in the hands of the assessee. Carry forward of excess of expenditure over income for the year - claim of the assessee is that if there is a deficit during one assessment year it should be allowed to be carried forward to the next assessment year as the deficit of the earlier years is allowable as application of income in subsequent years - AO and CIT-A denied claim - HELD THAT:- Hon’ble Bombay High court has dismissed the appeal of the Revenue in DIT(E) v. Gem & Jewellery Exports Promotion Council [2011 (9) TMI 1178 - SC ORDER] on the issue of set off of deficit of earlier years against surplus of the impugned assessment year. Further Hon’ble Courts/Tribunal had taken consistent stand that in case of Charitable Trust excess expenditure over income is to be allowed to be carried forward for setting off against income of subsequent years. Thus the deficit of this year is allowable to assessee for set off in subsequent years. Therefore, we allow the carry forward of excess expenditure over income to be carried forward to subsequent years . Thus, we reverse the orders of lower authorities and allow ground no 2 of the appeal.
|