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2020 (6) TMI 22 - AT - Income TaxExemption u/s 11 - Corpus donations - HELD THAT:- Out of 11 donors only 2 donors had submitted that they have donated not for corpus. All other donors have appeared and filed their respective covering letters stating that the donations given to the assessee was for the purpose of corpus. In such a scenario, the AO erred in drawing adverse inference against persons who had appeared and corroborated by deposing before the AO that they had made the donations for the corpus of the assessee. However since two (2) donors had submitted that donation is to be treated as donation not for corpus, therefore, we direct partial addition - Decided in favour of assessee. Calculation of the allowable (15%) accumulation of income - As per AO 15% accumulation of income allowed u/s. 11(1)(a) of the Act is to be computed with reference to the net income after deduction of expenses incurred for earning such income - HELD THAT:- The issue under consideration in respect of accumulation of income allowed u/s. 11(1)(a) is no longer res integra. For that we rely on the decision of Green Wood High Trust Vs. ACIT(Exemption) [2018 (1) TMI 1105 - ITAT BANGALORE] - direct the AO to allow the accumulation income u/s. 11(1)(a) of the Act at 15% of the gross receipt as claimed by the assessee and consequently ground raised by the assessee is allowed. Excess application of income - HELD THAT:- Hon’ble Supreme Court in CIT-Exemptions Vs. Subros Educational Society [2018 (4) TMI 1622 - SC ORDER] wherein it was held that eligible trust which are enjoying the registration u/s. 12AA of the Act are entitled to carry forward and set off of the excess application of income - direct that the excess expenditure incurred by the assessee trust in earlier assessment year should be allowed to be set off against the income of this year and so I allow the claim of the assessee as application of income. Not allowing tax deducted at source - HELD THAT:- As decided in JAYASHREE CHARITY TRUST [1984 (12) TMI 30 - CALCUTTA HIGH COURT] there is no reason to deny the benefit of exemption granted by section 11 to that portion of income which had been taken away by deduction of tax at source on the ground that amount had not been spent/ accumulated for the purpose of charity. Direct the AO to allow tax deducted at source by assessee as application of income. Disallowing the establishment expenses as application of income - HELD THAT:- Said issue is no longer res integra since Hon’ble Calcutta High Court in Birla Janhit Trust [1990 (8) TMI 5 - CALCUTTA HIGH COURT]held that salaries and miscellaneous expenses, which are incurred for carrying out the objects and purposes of the trust must be considered as application for charitable purposes. I note that the assessee had claimed total expenses of ₹ 11,27,264/- (establishment expenses), however, AO estimated the expenses at ₹ 13,56,000/- which is per-se arbitrary and erroneous and ld. CIT(A) erred in confirming it. So direct the AO to allow the establishment expenses claimed by the assessee to the tune of ₹ 11,27,264/- as application of income u/s. 11(1)(a) of the Act. Order being pronounced after ninety (90) days of hearing - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. For coming to such a conclusion, rely upon the decision of the Co-ordinate Bench of the Mumbai Tribunal in the case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI].
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