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M/s Provincial Congregation of Sisters of St. Charles Versus The Dy. Director of Income-tax (Exemption) , Circle 17 (2) , Bangalore.

2016 (1) TMI 123 - ITAT BANGALORE

Accumulation of income u/s 11(1)(a) - Held that:- A perusal of the computation of total income done by the AO vide para 8 of the asst. order shows that there was net surplus of ₹ 51,52,825/- before the income being applied for charitable purpose. After applying the said income to the capital expenditure of ₹ 100,04,167 lakhs there remains no income. Therefore, the question of accumulated income for the future years does not arise. The issue in appeal is purely academic in nature does .....

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4, LTU, Bangalore dated 12/3/2015 for the assessment year 2011-12. 2. The assessee raised the following grounds of appeal : (1) The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. (2) The learned CIT(A) is not justified in upholding, in principle, the action of the learned AO in computing the accumulation of income u/s 11(1)(a) of the Act, at 15% of the net income from .....

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secuting the appeal and also order for the refund of the institution fees as part of the costs. 3. The brief facts of the case are that the assessee society vide return of income for the assessment year 2011-012 on 9/3/2012 declared nil income. Against the said return of income, the assessment was completed u/s 143(3) of the Act vide order dated 20/12/2013 by the learned Dy. Director of Income-tax (Exemption), Circle - 17(2) declaring Nil income. While doing so, the learned AO made the computati .....

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n for objects of trust a. Capital Expenditure 100,04,167 b. Corpus donations c. Repayment of loan V. Balance Nil VI. Accumulation u/s11(1)(a) to the extent of 15% of Net surplus (para IV) limited by actual balance as per amount available in the hands of the trust (para VI) 44,30,789 VII. Amount accumulated u/s 11(2) (Form No.10 filed) 7,22,037 VIII. Balance taxable income Nil IX. Tax thereon Nil Tax deducted source Nil X. Balance payable refundable 4. From the above computation, it is clear that .....

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s received from KHPT etc., apart from income from the hospital and the educational institutions run by the appellant, has not been appreciated and the principle of 15% accumulation on net educational income has been applied without proper mind application. To the extent the appellant receives donations, the accumulation from such receipts are to be treated in terms of the Hon ble Supreme Court s decision in case of Programme for Community Organization (Supra). The receipts from the hospital and .....

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