TMI Blog2010 (7) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... Kavita Jha, Advocates 3) ITA No. 30 of 2010 DIRECTOR OF INCOME TAX VERSUS NATIONAL INSTITUTE OF URBAN AFFAIRS Through: Ms. Prem Lata Bansal, Advocate. Through: Nemo 4) ITA No. 589 of 2008 DIRECTOR OF INCOME TAX (EXEMPTION) VERSUS MANAGEMENT DEVELOPMENT INSTITUTE Through: Ms. Prem Lata Bansal, Advocate. Through: Mr. Ajay Vohra with Ms. Kavita Jha, Advocates 5) ITA No. 25 of 2009 DIRECTOR OF INCOME TAX (EXEMPTION) VERSUS THE HUNGER PROJECT Through: Ms. Prem Lata Bansal, Advocate. Through: Mr. S.R. Wadhwa, Advocate CORAM:- HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE REVA KHETRAPAL A.K. SIKRI, J. (Oral) 1. The following questions of law are sought to be raised in all these appeals: a) Whether the Income Tax Appellate Tribunal was correct in law in allowing the assessee to carry forward deficit of the current year and to set off the same against the income of subsequent years? b) Whether the Income Tax Appellate Tribunal was correct in law in allowing the assessee to carry forward and set off the losses against the income of subsequent year ignoring that the determination of income under Sections 11 to 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income applied to such purposes in India during theprevious year immediately following the previous year inwhich the income was derived as does not exceed the said amount. may, at the option of the person in receipt of the income (such option to be exercised in writing before the expiry of the time allowed under sub-section (1) of section 139 for furnishing the return of income) be deemed to be income applied to such purposes during the previous year in which the income was derived; and the income so deemed to have been applied shall not be taken into account in calculating the amount of income applied to such purposes, in the case referred to in sub-clause (i), during the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the case referred to in sub-clause (ii), during the previous year immediately following the previous year in which the income was derived. (1A) For the purposes of sub-section (1), - (a) where a capital asset, being property held under trust wholly for charitable or religious purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le or religious purposes in India during the period referred to in sub-clause (a) or, as the case may be, sub-clause (b), of the said clause, then, such income shall be deemed to be the income of the person in receipt thereof - (a) In the case referred to in sub-clause (i) of the said clause, of the previous year immediately following the previous year in which the income was received; or (b) In the case referred to in sub-clause (ii) of the said clause, of the previous year immediately following the previous year in which the income was derived." 3. It was the submission of Ms. Bansal that Section 11 which falls under Chapter-III is with the captioned "Income from property held for charitable or religious purposes" and thus specifically deals with the income derived from the properties which are held by the trust wholly for charitable or religious purposes. It further stipulates that the types of income enumerated in clause (a) to (d) of sub-Section (1) of Section 11 are not to be included in the total income of the previous years if the conditions contained in those clauses are fulfilled. For example, in clause (a) when it is mentioned that a particular income which is d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Gujarat High Court"s judgment in the case of Commissioner of Income Tax vs. Shri Plot Swetamber Murti Pujak Jain Mandal [211 ITR 293]. 6. We find from the order of the Income Tax Appellate Tribunal (hereinafter referred to as "the Tribunal") that the Tribunal has decided the issue in favour of the assessee by placing reliance on the aforesaid judgment of the Gujarat High Court. We have gone through the judgment of Gujarat High Court in Shri Plot Swetamber Murti Pujak Jain Mandal (supra). It could not be disputed by the learned counsel for the Revenue that the question of law raised and answered in the said case was identical to the one raised in the present appeals. This question was decided in favour of the assessee interpreting the provisions of Section 11 of the Act. The relevant discussion contained in the said judgment is in the following terms: "3. The learned DR sought to rely upon the finding of AO. None was present on behalf of the assessee. We find that the issue is answered by Hon'ble Gujarat High Court in the case of CIT vs. Shri Plot Swetamber Murti Pujak Jain Mandal (1995) 211 ITR 293 (Guj), wherein the High Court observed as under: "We are, therefore, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is advanced before us by the learned counsel for the Revenue to repel the same in the following words: "Now coming to question No.3, the point which arises for consideration is: whether excess of expenditure in the earlier years can be adjusted against the income of the subsequent year and whether such adjustment should be treated as application of income in the subsequent year for charitable purposes? It was argued on behalf of the Department that expenditure incurred in the earlier years cannot be met out of the income of the subsequent year and that utilization of such income for meeting the expenditure of earlier years would not amount to application of income for charitable or religious purposes. In the present case, the Assessing Officer did not allow carry forward of the excess of expenditure to be set off against the surplus of the subsequent years on the ground that tin the case of a charitable trust, their income was assessable under self-contained code mentioned in section 11 to section 13 of the Income-tax Act and that the income of the charitable trust was not assessable under the head "Profits and gains of business" under section 28 in which the provision for carry ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
