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2016 (1) TMI 495 - ITAT BANGALORE

2016 (1) TMI 495 - ITAT BANGALORE - TMI - Disallowance of claim for carry forward of deficit - whether resulting out of excess application over income - Held that:- The claim of the assessee that deficit from earlier years can be set-off against current year’s income for working out the utilisation, found approval.

In view of this, we are of the view that assessee is eligible for claiming carry forward of the deficit, and CIT (A) was justified in directing so. - Decided in favour of a .....

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see, a trust registered u/s.12A of the Income tax Act, 1961 ( the Act in short), had filed its return for the impugned assessment year claiming exemption u/s.11 & 12 of the Act. In the computation of income filed, assessee claimed carry forward of a deficit of ₹ 2,15,68,002/-. AO denied the claim for a reason that computation of loss under various heads of income and carry forward of such loss to subsequent assessment years for set off was applicable for only assesses other than those .....

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income / loss. He confirmed the order of AO. 04. Now before us, Ld. AR strongly assailing the order of lower authorities submitted that coordinate bench in the case of M/s. St. Francis Sales Educational & Charitable Trust v. ACIT [ITA.365/Bang/2015, dt.10.07.2015], had considered the judgment of Hon ble Delhi High Court in the case of Indian National Theatre Trust (supra) and held that a deficit arising on account of application of funds could be considered for carry forward. 05. Per contra .....

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ibunal in the case of M/s. St. Francis Sales Educational & Charitable Trust (supra). Same view has been taken by us in the case of DCIT v. M/s. Rashtrothana Parishat [ITA Nos.896 & 897/Bang/2014, dt.14.08.2015]. In para 9 of the latter order it was held as under : 09.Coming to the aspect of eligibility for carry forward of such deficit, coordinate bench of this Tribunal in the case of Rajarajeshwari Devasthana Trust v. ITO (Ex), in ITA No.116/Bang/2015, dt.11.06.2015, had considered this .....

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Act which was time barred and there is no provision under the Income tax to allow carry forward of the loss of the preceding years any excess expenditure/application of the preceding years were not to be set off against the subsequent years' surplus. Though the assessee has not specifically sought for any carry forward benefit, for the assessment years up to 2005-06 the assessee filed the return of income where the surplus was determined and the application was made during the years have be .....

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relevant year. The assessee filed the application u/s.154 up to assessment years 2004-05 in fact to enable the officer to ascertain the actual surplus of the application which was required to be set off against the surplus against the Assessment Year 2006-07. For Assessment Years 2004-05 and 2005-06 in the returns itself the claim was made and the excess surplus was shown. For this assessment year the assessment has been completed accordingly accepting the return though in the intimation, the as .....

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required to be assessed. Undisputedly in the instant case of the assessee, the trust had excess application over the income in the past years which was required to be considered against its income in order to ascertain the surplus left for the purpose of tax after allowing the exemption u/s.11(1) of the Act. 12. The counsel for the assessee submitted the Hon'ble Bombay High Court in Institute of Banking (supra) had observed that section 11 to 13 are self contained code for the purpose of de .....

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he surplus is computed after taking into account the net outgoing of the relevant year and earlier years. The Bombay High Court took support of the decision of the Gujarat High Court in Shri Plot Swetamber Murti Pujak Jain Mandal (supra). The learned counsel submitted that the Commissioner of Income-tax(A) decided the issue in assessee's favour following the above decision of the Bombay High Court. The Hon'ble Madras High Court decision reported in Govindu Naicker Estate (supra) also sup .....

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