TMI Blog2022 (4) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.70 cr has been invested in various banks. It is well settled that income derived from trust property has to be determined on commercial principles where 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 may be regarded as application of income of the trust for charitable and religious purposes in the subsequent year. Such an adjustment made having regard to the benevolent provisions contained in s. 11 of the Act will have to be excluded from the income of the trust u/s 11(1)(a) Contention of the Ld. AR that expenditure incurred in the earlier year can be met out of the income of the subsequent year and utilization of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Assessee against the impugned order dated 28.09.2018 passed by the Ld. Commissioner of Income Tax (Appeals)-4, Ludhiana, for the Assessment Year 2015-16. 2. The assessee has raised the following grounds of appeal: 1. The orders passed by the Assessing Officer and Ld. Commissioner of Income Tax (Appeal) vide orders dated 26.12.2017 and 28.09.2018 respectively are illegal, uncalled for and against the law facts. 2. Ld. Commissioner of Income Tax (Appeal) has sustained the additions merely on conjectures and surmises without any legal basis. 3. The Ld. Commissioner of Income Tax (Appeal) has wrongly sustained the additions on the ground that Assessee has failed to explain the amount of investment made out of set a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,17,956/- being amount less utilized by 85% of the total receipts. 3. The Ld. CIT(A) rejected the appeal of assessee by observing that the assessee failed to disclose the amount of ₹ 72,50,000/- in Audit Report filed on 19.09.2015 in form 10B as well as in the Return of Income and that the assessee has not given details to satisfy the required condition that the accumulated funds of the year under appeal itself were invested in modes specified u/s. 11(5) of the Act. 4. The Ld. Counsel for the assessee submitted that CIT(A) has admitted in the impugned order that assessee has filed Form 10 during the course of assessment proceedings (Page 9). He contended that since there is no provision to file revised return after 809 days or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61/- in Scheduled Bank which is a eligible mode of investment u/s. 11(5) of Income Tax Act. Thus all the adverse observations of Ld. AO and Hon'ble CIT(A) are met by the assessee society. Sir, without prejudice to the above it is stated that it is well settled position that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is requested that addition made in the hands of assessee may kindly be deleted. 5. The Ld. DR stands by the CIT(A) order. 6. Heard. Admittedly, the appellant assessee society has filed Form 10 during the course of assessment proceedings [Page 9, CIT(A) order]. It is seen that the amount of accumulated funds for the year under appeal itself were invested in the modes specified u/s. 11(5) of the Act as evident from the Balance Sheet which were on record with both Ld. AO and Hon'ble CIT(A) and further CIT(A) itself stated that ₹ 1.70 cr has been invested in various banks on Page 9 of the impugned order. 7. It is well settled that income derived from trust property has to be determined on commercial principles where adjustme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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