TMI Blog2022 (3) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11[1][a] of the Act. On the second issue of carry forward and set off of losses against the income of the current year, this has been put at rest by the Apex Court and Hon'ble Jurisdictional High Court in favour of the assessee and therefore remains no more res integra. Thus, we do not find any merit in the appeal filed by the Revenue, which is dismissed. - ITA No. 353/Ahd/2019 - - - Dated:- 28-2-2022 - S/SHRI PRAMOD M. JAGTAP , VICE PRESIDENT AND T. R. SENTHIL KUMAR , JUDICIAL MEMBER For the Appellant : Ajay Pratap Singh , CIT - DR For the Respondents : Pramod Kedia , CA ORDER Per T. R. Senthil Kumar , judicial Member This appeal is filed by the Revenue against order dated 18.12.2018 passed by Ld. Commissioner of Income-tax (Appeals)-9, Ahmedabad [for short Ld. CIT(A)] in Appeal No. CIT(A)-9/10240/DCIT(E) Cir-1/17-18 relating to the assessment year 2015-16. 2. Grounds of appeal raised by the Revenue are as follows: 1. Whether the Ld. CIT(A) has erred in the law and facts in allowing the assessee accumulation u/s. 11(1)(a) at the rate of 15% instead of allowing the accumulation to the extent of available surplus funds/income as provided in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 16,73,25,354 16,73,25,354 5. Less: 15% of balance-Standard accumulation u/s. 11[1][a] 1,94,34,107 NIL 6. Excess application - 5,71,98,746 - 3,77,64,639 4. Aggrieved against this order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)-9, Ahmedabad. The Ld. CIT(A) allowed the claim of the assessee by holding as under: 4.3 I have carefully considered the contentions of the appellant and the observations of the A.O. It is observed that the A.O. has restricted the excess expenditure incurred for the year under consideration at Rs. Nil as against (-) ₹ 5,71,98,746/- as declared in the return of income. The appellant is aggrieved by the wrong application of Sec-11(1)(a) of the Act by the A.O. According to the appellant, the total receipts during the year including the corpus donation are ₹ 13,51,06,715/-. Out of this, an amount of ₹ 55,46,000/- was received as corpus which is exempted u/s. 11(1)(d) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to have been applied for charitable and religious purposes in the year in which the expenses incurred for Charitable and religious purposes had been adjusted. There is nothing in the language of section 11(1)(a) of the Act to indicate that the expenditure incurred in the earlier year cannot be met out of the income of the subsequent year and utilization of such income for meeting the expenditure of the earlier year, would not amount to such income being applied for charitable or religious purposes. Income derived from trust property has to be determined on commercial principles and if commercial principles for determining the income are applied, it is but natural that the adjustment of the expenses incurred by the trust for charitable and religious purposes in the earlier year against income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which such adjustment has been made having regard to the benevolent provisions contained in section 11 of the Act and will have to be excluded from the income of the trust under section 11(1)(a). 5. Following the juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly interfered with the order of the Income-tax Officer? 2. The answers being in favour of the assessee, the revenue is in appeal by special leave. 3. The question that really requires consideration is whether, for the purposes of section 11(1)(a) of the Income-tax Act, 1961 ('the Act'), the amount for the grant of exemption of twenty-five per cent should be the income of the trust or it should be its total income determined for the purposes of assessment to income-tax. This question has to be answered in the light of these facts: the assessee-trust received donations in the aggregate sum of ₹ 2,57,376. It applied there out for its charitable purposes the aggregate sum of ₹ 1,70,369 leaving a balance of ₹ 87,010. The question is whether the assessee is entitled to accumulate twenty-five per cent of ₹ 2,57,376, as it contends, or twenty-five per cent of ₹ 87,010, as the revenue appeared to contend. Section 11(1)(a) reads thus: 11 Income from property held for charitable or religious purposes.-(1)(a) Income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligious purposes in the subsequent year in which such adjustment has been made having regard to the benevolent provisions contained in section 11 of the Act and will have to be excluded from the income of the trust under section 11(1)(a) of the Act. 7.1. Further reliance was placed on the judgment Hon'ble Supreme Court in the case of CIT(Exemption) Vs. Subros Educational Society, 92 taxmann.com 652, wherein issue raised by the Revenue was that whether any excess expenditure incurred by trust/charitable institution in earlier assessment year could be allowed to be set off against income of subsequent years by invoking section 11. After hearing the Department, Hon'ble Supreme Court has found no merit on the question of law raised by the Department, and accordingly, MA filed by the Department was dismissed. 8. However, the Ld. DR has not brought any contrary judgments to support the case of the department and present status of the appeal against these orders, but fairly conceded that the issue on hand is covered against the Revenue. 9. In view of above decisions of the co-ordinate bench in assessee's own case for the earlier asst. years 2010-11 and 2012-13, we ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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