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TMI Blog2018 (3) TMI 1192X X X X Extracts X X X X X X X X Extracts X X X X ..... ) / AO) for the assessment years 2010, 2011-12 vide different orders dated 06-01-2014 & 31.12.2013 under section 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in these two appeals of assessee is as regards to the order of CIT(A) confirming the action of the AO in disallowing the claim of accumulation or setting apart at 15% of the gross income. For this assessee has raised exactly identical worded grounds for AY 2010-11 and 2011-12. The grounds raised in AY 2010-11 reads as under: - "1. On the facts and in the circumstances of the case, and in law, the learned CIT (Appeals) erred in confirming the disallowance regarding the claim of Accumulation or setting apart ol' Its. 66,24.580 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02,75,595/- to be carried forward and set off against the income of subsequent years. The AO after considering the submissions of the assessee noted that the claim of assessee trust cannot be accepted as it has an income of Rs. 4,41,63,870/- against which its claiming application of income amounting to Rs. 4,78,14,884/- which is more than its income. According to AO there is no income left which can be accumulated. The AO held that the accumulation to the extent of Rs. 66,24,580/- cannot be allowed and for this he observed in Para 5.5 as under: - "5.5 In the assessee' case there is no income remaining after applying it towards the object of the trust. The assessee has income of Rs. 4,41,63,870/- and has spent Rs. 4,78,14,884/- towards th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of twenty- five per cent of the income from such property." 5. From the plain reading of section 11(1)(a) of the Act it is clear that in case of wholly charitable religious Trust, if the income is to be accumulated for application to the Trust purposes in India, it may be accumulated to the extent of 15% of the income of the Trust. The income contemplated by this provision is the real income and not the income as assessed or as assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct at the rate of 15% of the gross income. We are of the view that exemption available under section 11(1)(a) i.e. 15% of income is invested and not subject to any condition. According to us, there is no bar in law and there is no specific provision in the act which says that such deduction of 15% for accumulation will not be allowed in case of deficit but such 15% accumulation is allowable irrespective of whether 15% of income have been applied or not. Similar is the position in the case of ACIT vs. A.L.N. Rao Charitable Trust (1995) 216 ITR 697 (SC) here the meaning of applied in this context means that the income is actually applied for the charitable or religious purposes of the trust but the word applied need not necessarily imply spen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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