TMI Blog2015 (12) TMI 1667X X X X Extracts X X X X X X X X Extracts X X X X ..... BOMBAY High Court ] - Decided in favour of assessee - I.T.A. No.969/Bang/2015 - - - Dated:- 29-12-2015 - SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI VIJAYPAL RAO, JUDICIAL MEMBER For The Appellant : Shri Suresh Muthukrishnan, C.A. For The Respondent : Shri Sunil Kumar Agarwala, JCIT (D.R) ORDER Per Shri Vijaypal Rao, J.M. : This appeal by the assessee is directed against the order dt.24.2.2015 of the Commissioner of Income Tax (Appeals), LTU, Bangalore for Assessment Year 2011-12. 2. The assessee has 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 (Appeals) is not justified in upholding the denial of carry forward of the deficit being the excess application of income amounting to ₹ 72,04,418 to be set off against the income from property held under trust in the future under the facts and in the circumstances of the appellant s case. 3. The learned CIT (Appeals) ought to have appreciated that the carry forward of the deficit to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative submitted that the issue is now covered in favour of the assessee by the order of this Tribunal in assessee's own case. On the other hand, the learned Departmental Representative has submitted that the CIT (Appeals) has confirmed the disallowance by following the decision of the Bombay Bench of the Tribunal in the case of ITO Vs. Trustees of Sri Satya Sai Trust reported in 33 ITD 320 as well as the decision of the Delhi Bench of the Tribunal in the case of Pushpavati Singhania Research Institute of Liver, Renal and Digestive Diseases Vs. DDIT reported in 29 SOT 316. Thus the learned D.R. has submitted that when the CIT (Appeals) has followed the decision of the Tribunal, then the finding of the CIT (Appeals) cannot be held as erroneous or illegal. He has relied upon the order of the CIT (Appeals). 5. Having considered the rival submissions and careful perusal of the relevant material on record, we find that for the Assessment Year 2007-08, an identical issue was raised for consideration and adjudication. While deciding the issue, the co-ordinate bench of this Tribunal has held in para 5.3.1 to 5.3.4 as under :- 5.3.1 We have heard the rival contentions of bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 211 ITR 293 (Guj). Accordingly, we answer question No. 3 in the affirmative i.e., in favour of the assessee and against the Department. 5.3.2 The co-ordinate bench of this Tribunal in the case of Baldwin Methodist Educational Society (supra), has held as under :- We also find that A bench of this Tribunal in the case of Academy of Liberal Education in ITA No.687/Bang/2014 dated 20/2/2015, to which one of us i.e. the Accountant Member is the signatory, has considered this issue and in para.8 of its order, held as under: 8. We are of the view that pendency of an appeal before the Hon'ble High Court of Karnataka cannot be the basis not to follow the decision on the issue already rendered in identical cases. Section 11(1)(a) does not contain any words of limitation to the effect that the income should have been applied for charitable or religious purpose only in the year in which the income has arisen. The application for charitable purposes as contemplated in section 11(1)(a) takes place in the year in which the income is adjusted to meet the expenses incurred for charitable or religious purposes. Hence, even if the expenses for such purposes have been inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred expenditure on religious and charitable purposes from the income of the subsequent year, even though the actual expenditure was in the earlier years, if in the books of account of the trust such earlier expenditure had been set off against the income of the subsequent year. The expenditure that can be so adjusted can only be expenditure on religious and charitable purposes and no other. The High Court relied on the decision in the case of CIT Vs. Society of Sisters of ST. Anne 146 ITR 28 (Kar). We find that the order of the CIT(A) is in consonance with the judicial precedents reproduced above. Therefore, we see no reason to interfere with the order of the CIT(A). The revenue s appeal is, accordingly, dismissed. 5.3.3 It is clear from the relevant portions of the aforesaid decisions of the Hon'ble High Court of Bombay (supra) and the co-ordinate bench of the ITAT, Bangalore (supra) extracted above that the income of charitable trusts is required to be computed on commercial principles. The concept of application of the income for the year in which the income has arisen is not found in Section 11(1)(a) of the Act. No limitation to the above effect is found in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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