TMI Blog2015 (9) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) of the Act, i.e., there should be corresponding investment, which could be identified with the income accumulated. The period of six months prescribed in Form No.10, in our view, is the outer limit for making deposit/investment. The provisions of sec. 11(2)(a) talks about “income”, where as the provisions of sec. 11(2)(b) talks about the “money” so accumulated. The “money” available with the assessee may be pertaining to the current year’s income or earlier year’s income. Further, if the view taken by the tax authorities that the deposit should have been made out of current year’s income is accepted as correct for a moment, then the assessee trust shall be forced to foreclose the existing deposit and thereafter make a new deposit, thus losing considerable amount towards loss of interest/penalty. The same would be very much technical in nature. Hence, in our considered view, the earmarking of existing bank fixed deposits, which is free from any lien, towards the income accumulated u/s 11(2) of the Act during the year under consideration would be sufficient compliance with the provisions of sec. 11(2)(b) of the Act, since the accumulated income is represented by the correspondi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) of the Act on the ground that it was accumulated for future application. As per the provisions of sec. 11(2) of the Act, the money so accumulated or set apart is required to be invested or deposited in the forms or modes specified in section 11(5) of the Act. 5. The assessee has furnished details of deposit as under: Deposit No. Date of Deposit With whom the amount is deposited Amount of Deposit Due date 0685101000005345 22.02.03 South Indian Bank Ltd., Bazar Branch, Thrissur 108,243 22.02.06 0085101000004639 23.09.2002 -do- 518,399 21.09.05 PWD 20022213 23.09.2002 Catholic Syrian Bank Ltd., Thrissur Main 519,110 22.09.2005 PWD 012753 31.01.2004 Catholic Syrian Bank Ltd., East Fort, Thrissury 750,000 28.02.06 00841010000010754 31.01.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the order passed by the Tribunal on a different ground before the Hon ble High Court of Kerala and hence, the order of the Tribunal on this issue has been accepted by the Revenue. He further submitted that the assessee has been earmarking the lien free deposits in identical manner in other years also and the same has not been found fault with by the assessing officer. The Ld. Counsel further submitted that the Act does not prescribe any condition that only current year s income should be invested in specified assets in order to avail deduction u/s. 11(2) of the Act. 8. On the other hand, the Ld. DR submitted that the assessee cannot place reliance on the decision of the Tribunal in the case of Ollur Sadhu Samrakshna Sangham, cited supra, since the facts prevailing in that case are totally different. Inviting our attention to the decision rendered by the Tribunal in the above cited case, the Ld. DR submitted that the assessee therein had invested in the earlier years in Kisan vikas Patras. The interest income accrued in the Kisan Vikas Patras Scheme shall be repaid only on maturity along with the principal amount. However, the above said assessee was following mercantile syste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated. There will not be any check if the assessee is not mandated to make deposit/investment of the income so accumulated. 12. In the instant case, there is no dispute that the assessee has passed a resolution for accumulation of income duly specifying the purpose of accumulation. Out of the sum of ₹ 31.35 lakhs claimed u/s 11(2) of the Act as accumulation of income, a sum of ₹ 20.00 lakhs was found to have been deposited in bank fixed deposits during the year under consideration. For the remaining amount, the assessee has earmarked the fixed deposits already available with it towards the income accumulated u/s 11(2) of the Act. Considering the objective of the provision of sec. 11(2)(b), in our view, what is required to be seen is whether the income accumulated has been deposited or invested in the forms prescribed u/s 11(5) of the Act, i.e., there should be corresponding investment, which could be identified with the income accumulated. The period of six months prescribed in Form No.10, in our view, is the outer limit for making deposit/investment. 13. It is also pertinent to note that the provisions of sec. 11(2)(a) talks about income , where as the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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