TMI Blog2017 (10) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... for short 'the Act'). 2. Brief facts of the case are that the assessee is a trust registered with Director of Income Tax Exemptions [DIT (E)] Mumbai under section 12A of the Act and Charity Commissioner, Mumbai, filed its return of income for the relevant assessment year as nil. The case was selected for scrutiny and notice under section 143 (2) and 142(1) along with questionnaire. In response thereof the authorised representative of the assessee appeared before the AO and submitted the details called for. It was seen that assessee had claimed deficit of Rs. 1,87,32,411/-. The assessee claimed to have "applied" amount in excess of 85% of income during the year. The assessee had also claimed carry forward of this excess application as defic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to double deduction on account of expenditure out of exempt income. 2. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in allowing to carry forward of deficit on account of excess expenditure and directing the Assessing Officer to allow carry forward of deficit on account of excess expenditure without appreciating the fact this would have the effect of granting double benefit to the assessee, first as ' accumulation' of income u/s 11(1)(a) or as corpus donation u/s 11(1)(d) in earlier years/current year and then as 'application' of income u/s 11(1)(a) in the subsequent years which was legally not permissible? 3. Whether, on the facts and in the circumstances of the case and in law, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, there is no merit in the appeal of the revenue and the same is liable to be dismissed. 7. We have heard the rival submissions and perused the material on record and also gone through the cases relied upon by the authorities below. The only issue involved in this case is whether the Ld CIT(A) has erred in allowing carry forward of deficit in question and allowing set off against the income of the subsequent years? The AO has answered the said question in affirmative by following the ratio of law laid down by the Hon'ble jurisdictional High Court in CIT vs Institute of banking (supra). The operative part of the impugned order reads as under: "I have considered the facts and circumstances of the case, gone through the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment that expenditure incurred in the earlier years cannot be met out of the income of the subsequent year and that utilisation of such income for meeting the expenditure of earlier years would not amount to application of income for charitable or religious purposes. In the present case, the Assessing Officer did not allow carry forward of the excess of expenditure to be set off against the surplus of the subsequent years on the ground that in the case of a charitable trust, there income was assessable under self-contained code mentioned in section 11 to section 13 of the Income Tax Act and that the income of the charitable trust was not assessable under the head "Profits and Gains of Business" under section 28 in which the provision for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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