TMI Blog2014 (2) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(a) - The deficit returned by the appellant is valid, which may be modified subject to the decisions of the undersigned on various additions made by the A.O - If the modified position is also deficit, in that case, the appellant is not entitled for carry forward of such deficit as there is no such scheme in any of the sections like section 10, section 11, section 12, section 13 etc., the sections applicable to the activities of the appellant - It is the duty of the A.O. to correctly compute the deductions allowance etc., under the Income Tax Act - The AO was directed to compute the correct income of the trust - Decided against Revenue. - ITA.No.649/Hyd/2012 - - - Dated:- 5-2-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n detail and perused the paper book placed on record. 3. Briefly stated, assessee is a registered society registered under section 12A of the Act. It filed return of income on 29.10.2007 reporting excess expenditure over income of Rs.50,61,138/-. The return was not originally selected but later on reopened under section 147 by issuing notice under section 148 of the Act. The A.O. completed the assessment inter alia making various disallowances. While doing so, he has made an addition of Rs.12,72,180/- representing waiver of principle of loan, treating it as income from property held on the trust. Moreover, the excess of expenditure over income was ignored and benefit of section 11 was also not granted on the reason that when the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h addition made by the A.O. is not sustainable. 6. Learned D.R. vehemently argued that that waiver of the principal amount has to be treated as income and relied on the decisions of Hon'ble Bombay High Court in the case of Solid Containers Ltd. vs. CIT 308 ITR 417 and also decision of Log Electronics Pvt. Ltd. vs. CIT 333 ITR 386 whereas, learned A.R. relied on the paper book to explain the facts and submitted that the case law relied upon by the Revenue does not apply. 7. As can be seen from the records and issue contested before us, there is no dispute with reference to the fact that assessee is treated as trust AND has been registered under section 12A and also nature of activity is charitable activity. Therefore, the computation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dded were treated as income, without considering for any exemption even though trust is registered under section12A. 9. Before the CIT(A), assessee contested the same to submit that decision in the case of Rajasthan High Court relied upon by the AO has no application to the facts of the case. In that case, the said trust has incurred expenditure over income from accumulated funds of earlier years and therefore, on those facts, the said trust was not allowed to claim exemption under section 11(1A) of the Act. The assessee submitted before the CIT(A) that total expenditure at Rs.2.11 crores on various heads was out of the assessee's own receipts received during the year and A.O. was not justified in holding that excess of expenditure has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Thus, this ground of appeal is treated as dismissed." 10. After considering the rival contentions, we do not see any reason to uphold Revenue's contentions. Even though the representation made by the assessee in the computation is erroneous, it is the duty of the A.O. to correctly compute the deductions allowance etc., under the Income Tax Act. Instead the A.O. ignored the entire computation and wrongly applied the principles in the case of Easwari Prasad Trust, to deny the assessee's rightful claims. Learned CIT(A) has clearly set out the principles and also directed the A.O. to compute properly. In view of this, we do not see any merit in the Revenue contention. Ground is not sustainable. 11. In the result, appeal of the Revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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