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2016 (4) TMI 414 - ITAT CHENNAI

2016 (4) TMI 414 - ITAT CHENNAI - TMI - Taxability of unutilized accumulated amount - selection of assessment year - Held that:- The returns of income filed by the assesseee for the A.Ys. 2005-06 & 2006-07 marked as 'E' & 'F', (which is enclosed) that the assesseee carried forward the accumulation as unutilized funds for the AY 1999-00, which was not at all spent. However, before the CIT(Appeals), it was taken a plea that it was spent in AY 2005-06 and 2006-07 as per the revised computation file .....

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have produced the order issued from the CMDA on 19.3.2009 and the reason for delay in filing the said letter for such a long period till the Assessing Officer making the assessment for the assessment year 2010-11 is not acceptable. There exists no reason for such delay. We are not in a position to accept the submission of the assesseee. Accordingly, we are inclined to reverse the order of the CIT(Appeals) and restore that of the AO. - Decided in favour of revenue

Allowance of deprecia .....

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double deduction. Therefore, this Tribunal is of the considered pinion that provisions of section 11 of the Act will override section 32. In other words, if the assessee claims exemption u/s 11 under Chapter III of the Act, it cannot claim depreciation u/s 32 of the Act. Therefore, we are unable to uphold the order of the CIT(A). Accordingly, the order of the CIT(A) is set aside and that of the Assessing Officer is restore - Decided in favour of revenue - ITA No. 1599/Mds/2014 - Dated:- 11-12-20 .....

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essment year 1999-2000 need not be taxed in assessment year 2010-11. 3. The facts relating to issue of disallowance of unutilized amount taxed u/s.11(2) of the Act are that the assessee filed a statement showing accumulation and utilization of funds from assessment year 1999-2000 to assessment year 2010-11. The Assessing Officer arrived at the taxable amount of ₹ 1,17,69,950/- which is as under:- Gross Receipts for AY 1999-2000 ₹ 2,13,81,416 Less : 25% thereon ₹ 53,45,354 ͅ .....

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ng to the AO, unspent amount including 25% of permissible accumulation is to be taxed in view of the provisions of sec.11(3)(c) as per the direction of the CBDT contained in Circular No.29 dated 23.8.1969. Accordingly, the Assessing Officer brought to tax the short fall in application of ₹ 1,17,69,950/- in the assessment year under consideration. Aggrieved, the assessee went in appeal before the CIT(Appeals). 4. On appeal, the CIT(Appeals) observed that there was utilization of amount pert .....

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AO, was not accepted. Accordingly, he observed that surplus pertains to AY 1999-2000 should be treated as utilized during AYs 2005-06 and 2006-07 and he deleted the addition. While allowing the claim of the assessee, he considered revised working for the purpose of accumulation of fund. Against this, the Revenue is in appeal before us. 5. We have heard both the parties and perused the material on record. We have gone through the details mentioned in the statement of accumulation and utilisation .....

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mount of ₹ 1,60,36,062/-, being 75% of the receipts. However, in that year, the assessee applied only an amount of ₹ 68,04,607/- [Rs. 11,17,487 + ₹ 30,08,284 + ₹ 26,78,836] towards revenue expenditure and an amount of ₹ 28,06,859/- [Rs. 27,06,000 + ₹ 1,00,859] as Capital Expenditure, resulting in a shortfall of application to the extent of ₹ 64,24,596/-. The above calculation is reproduced hereunder from the statement of Utilization of Income attached as .....

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. 1999-2000 was never utilized till the A.Y. 2010-11. As per the law enforceable, the assessee had the liberty to utilize the said accumulation upto a period of 10 years or in the year immediately following such period. It is for the assessee to decide in which A.Y. and how much accumulated amount is to be spent. 6.2 A perusal of the earlier years records shows that the assessee had utilized the accumulated amount [pertaining to A.Y. 2000-01 and 2001-02 in assessment years 2005-06 & 2006-07, .....

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d a revised computation of income from AY 1999-00 to 2010-11, revising the entire application of income and accumulation of income. However, the Assessing Officer did not accept this. As stated earlier the unspent amount including the 25% of permissible accumulation is to be taxed in case of failure to spend within the stipulated time u/s.11(3)(c) of the Act. The same view has been reiterated in CBDT's Circular No.29 dated 23.08.1969. 6.4 The unutilized accumulated income for the AY 1999-200 .....

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-07. This is evident from the statement of income filed for those years (enclosed as annexure - 'E' & 'F'). Now, during the assessment proceedings for A.Y. 2010-11, the assessee cannot turn around and file a revised "statement of application" revising its earlier claim made in A.Ys. 2005-06 & 2006-07. This would amount to "revising" the return of income for A.Ys. 2005-06 & 2006-07 in 2013 during the assessment proceedings for A.Y. 2010-11. As per t .....

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turns of income and making the necessary claims along with the return of income within the specified time limit for each assessment year. The claim of accumulation of income or exercising option is independent for each assessment year. The assessee cannot claim the application out of earlier year by filing a different statement of income during the scrutiny assessment proceedings for the subsequent assessment year. 6.6 In view thereof, the CIT(Appeals) observation that "had the sum pertaini .....

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t years, would be redundant. Accordingly, the relief granted by the CIT(Appeals) has no legs to stand and should be set aside and the Assessing Officer's order be restored. 6.7 Further, it is seen from the returns of income filed by the assesseee for the A.Ys. 2005-06 & 2006-07 marked as 'E' & 'F', (which is enclosed) that the assesseee carried forward the accumulation as unutilized funds for the AY 1999-00, which was not at all spent. However, before the CIT(Appeals) .....

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essee is intending to purchase the land. However, if the assesseee is bona fide, the assessee should have produced the order issued from the CMDA on 19.3.2009 and the reason for delay in filing the said letter for such a long period till the Assessing Officer making the assessment for the assessment year 2010-11 is not acceptable. There exists no reason for such delay. We are not in a position to accept the submission of the assesseee. Accordingly, we are inclined to reverse the order of the CIT .....

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