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2015 (11) TMI 645 - ITAT DELHI

2015 (11) TMI 645 - ITAT DELHI - TMI - Entitlement for the accumulation of income - submission of form No 10 delayed - Held that:- Honourable Gujarat high court in case of CIT V Mayur Foundation Mayur Foundation [2004 (12) TMI 48 - GUJARAT High Court ] has held that if form no 10 is submitted at any time before the assessment is completed same should be considered as valid compliance of law. Admittedly in this case assessee has submitted the form No 10 before the completion of assessment proceed .....

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lication of income and further deprecation there on is also claimed - Held that:- this issue is squarely covered in favour of the assessee by the decision of Honourable Jurisdictional High court in case of Director of Income tax V Vishwa Jagriti Mission [2012 (4) TMI 289 - DELHI HIGH COURT] wherein held held that claim of depreciation on fixed assets utilized for the charitable purposes has to be allowed while arriving at the income available for application to charitable and religious purposes, .....

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vide order dated 11.1.1998 mainly for the objects and activities promotion of Fashion Design Industries. For AY 2007-08 it filed its return of income on 31.10.2007 disclosing nil income. In the computation of income assessee showed income from property held under trust amounting to ₹ 22,11,76,304/- and reduced therefrom amount spent during the previous year of ₹ 18,02,20,722/- leaving surplus of ₹ 4,09,55,582/-. For this amount assessee submitted declaration under explanation 2 .....

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fag end of the assessment proceedings. AO also stated that certified copy of resolution is submitted and not the original resolution. b. In the original resolution form no 10 was not attached. Therefore condition that form no 10 which was required to be submitted along with return of income was not complied with. c. Signatories of return of income as well as the resolution for accumulation of income are different trustees. d. AR of the assessee failed to produce the minute book of the trust. Fur .....

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or determinable purposes for the accumulation of income. According to CIT (A) accumulation in global manner is not envisaged u/s 11(2) of the Act. Therefore relying on the decision of Honorable Calcutta High court in DCIT (Exe) V Trustees of Singhanai Charitable Trust 199 ITR 819 dismissed the appeal of the assessee on this count. Regarding the disallowance of depreciation the CIT (A) relying on the decision of Hon ble Supreme court in Escorts Ltd. vs. Union of India 199 ITR 43 holding that it .....

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f the trust and therefore the finding of the CIT (A) that it is not specific object is not correct. She submitted that form no. 10 is submitted before the assessing officer and along with a copy of resolution passed at meeting held on 25th October, 2007. She further submitted that the infirmity or genuineness doubted by the AO are incorrect as the same are certified copy of the resolution therefore she said that assessee trust should be granted the benefit of accumulation of its income. Regardin .....

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(A) as well as the assessing officer. He further pressed that promotion of fashion industry is not specific object as the trust itself exists with the aim of promoting Indian fashion worldwide therefore he submitted that in absence of pacific object the benefit of accumulation cannot be given. 06. We have carefully considered the rival submission and also perused the relevant documents produced before us. The total income of the trust is 2,221,176304/- out of that the amount of ₹ 189,2207 .....

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e fashion industry etc. (2) To take such other steps as the trustees consider as being in tune with the aforesaid objective of the trust. We have perused the Memorandum of the Assessee association where in the objects of the trust are defined under the heading of main object and ancillary object. The main object of the trust includes provision of effective forum for representation on the interest of the fashion design industry for its professional advancement and growth and also to make represen .....

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rust at serial no 2 of the main objects. Therefore it cannot be said that in form no 10 as well as in resolution no specific object is mentioned by the assessee. Further reliance placed by CIT (A) on the decision of Hon Kolkata High court in DCIT (exemption) V Trustee of Singhania Charitable Trust 199 ITR 819 does not apply to the facts of the case of the reason that in that case the assessee trust it has mentioned all the objects of the trust in form no 10. This is not the case here, assessee h .....

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ttedly in this case assessee has submitted the form No 10 before the completion of assessment proceedings therefore no fault can be found with the assessee. Therefore we are of the view that the form no. 10 submitted by the assessee before completion of assessment proceedings and is having the specific objects therefore trust is entitled for the accumulation of income. Hence, ground no. 1 of the appeal is allowed. 07. Regarding second ground of appeal about the allowability of depreciation AO ha .....

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avor of the assesse because of the decision of Honourable Delhi high court in case of DCIT V Vishwa Jagriti Mission dated 29/3/2012. 09 Ld DR relied on the orders of AO and CIT (A). 10 We have carefully perused the orders of lower authorities and arguments advanced. We are of the view that this issue is squarely covered in favour of the assessee by the decision of Honourable Jurisdictional High court in case of Director of Income tax V Vishwa Jagriti Mission 262 CTR 558 where in it is held that .....

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wned by the trust/institution is a necessary deduction on commercial principles. The Gujarat High Court, after referring to the judgments of the Karnataka, Maharashtra and Madhya Pradesh High Courts cited above, also came to the same conclusion and held that the amount of depreciation debited to the accounts of the charitable institution has to be deducted to arrive at the income available for application to charitable and religious purposes. 13. The judgment of the Supreme Court in Escorts Limi .....

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