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2016 (2) TMI 35 - ITAT MUMBAI

2016 (2) TMI 35 - ITAT MUMBAI - TMI - Carry forward of deficit and allowing set off against income of subsequent years - assessee is a trust - CIT(A) allowed the claim - Held that:- Carry forward of deficit of earlier years has to be set off against the surplus of subsequent years. See Commissioner Of Income-Tax Versus Shri Plot Swetamber Murti Pujak Jain Mandal (1993 (11) TMI 17 - GUJARAT High Court ), Commissioner Of Income-Tax Versus Maharana Of Mewar Charitable Foundation(Raj.)[1986 (7) TMI .....

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nd no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals) and affirmed the same. - Decided against revenue - ITA No.3774/Mum/2015, ITA No.3788/Mum/2015 - Dated:- 6-1-2016 - Shri Joginder Singh, Judicial Member For The Revenue : Shri A.K.Dhondial JCIT-DR For The Assessee : Ms. Arati Vissanji ORDER The Revenue as well as the assessee are in cross appeal against the impugned order dated 18/03/2015 of the Ld. First Appellate Authority, Mumbai. In the appeal of the assessee (I .....

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4 ITR 439) (Raj.), CIT vs Plot Swetamber Murtipujak Jain Mandal (211 ITR 293)(Guj.) and CIT vs Shimla Chandigarh Diocese Society (318 ITR 96) (P & H). My attention was also invited to the written submission filed before the ld. Commissioner of Income Tax (Appeals) and para-6, page -11 of the impugned order. On the other hand, the ld. DR, defended the conclusion arrived at in the impugned order by contending that no formal ground was raised by the assessee, therefore, the ld. Commissioner of .....

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ion was given by rejecting the submission of the assessee. In view of this fact, I am of the view that as per Article -265 of Constitution of India, the authorities are to levy and collect due taxes, therefore, since, no grievance is caused to either side, I remand this ground to the file of the ld. Commissioner of Income Tax (Appeals) to consider the submissions of the assessee. The assessee is also directed to raise a specific ground so that the same can be disposed of in accordance with law i .....

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nt of expenditure out of exempt income. On the other hand, the ld. counsel for the assessee, relied upon the decision from Hon ble jurisdictional High Court in CIT vs Institute of Banking (264 ITR 110) (Bom.), DIT(E) vs Shri Ville Parele Kelavani Mandal 232 taxman 499 (Bom.)(2015), CIT vs Leelawati Mehata Medical Trust (2015) 229 Taxman 276 (Bom), DIT (E) vs Framjee Cavasjee Institute (2014) 227 taxman 266 (Mag.), DIT(E) vs Indraprashtha Cancer Society (2014) 112 DTR 345 (Del.), CIT vs Siligurhi .....

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se in respect of any asset, acquisition of which has been claimed as an application of income under this section in the same or any other previous year. So far as, the word applied, in this context, means that the income is actually applied for charitable or religious purposes. The word applied need not necessarily imply (spent). Even an amount is irretrievably year marked and allocated for charitable or religious purposes, it may be said to have been applied to the purposes. Our view find suppo .....

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rposes will be exempt from income tax (Tirupati Trust vs CIT) (230 ITR 636, 640 (SC), thus, it is clear that the pre-requisite conditions for application of income u/s 11(1)(a), earlier part, are that the income must be derived from property held under the trust wholly for charitable or religious purposes and the exclusion of the income is limited to the extent to which such income is applied to such purposes for which the property are held by the trust. 3.3. There is no word of limitation in se .....

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e income for the purposes takes place in the year in which the income is adjusted to meet the expenses. In other words, even if expenses for charitable and religious purposes have been incurred for earlier year and the said expenses are adjusted against the income of the subsequent years. 3.4. Now, I shall examine the facts of the present appeal, in the light of the aforesaid discussions/judicial pronouncements. The facts, in brief, are that the Assessing Officer denied carried forward of defici .....

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