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2024 (3) TMI 882 - ITAT DELHIAccumulation of income u/s. 11(2) - Setting off of the earlier year excess utilization of funds - assessment of trust - set off of excess utilization of funds of earlier years against the surplus of the current year and accumulation of funds - HELD THAT:- As in assessee’s own case for AY 2016-17 passed [2022 (4) TMI 635 - ITAT DELHI] in the case of a charitable trust, there was no provision for carry forward of the excess of expenditure of earlier years to be adjusted against income of the subsequent years. No merit in this argument of the Department. Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment has been made having regard to the benevolent provisions contained in the section 11 of the Act and that such adjustment will have to be excluded from the income of the trust u/s 11(1)(a) of the Act. Our view is also supported by the judgment of CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal [1993 (11) TMI 17 - GUJARAT HIGH COURT Thus we hereby direct the AO to allow the claim of the assessee regarding set off of the excess utilization of funds and accumulation of income. Assessee appeal allowed.
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