TMI Blog2022 (7) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... India. It was further held that the words in India appearing in section ll(l)(a) and the words outside India appearing in section 11(l)(c) qualified the word applied appearing in these provisions and not the words said purposes. Thus, it is well settled law that the expenditure incurred by the trust outside India cannot be considered as application of income as per Section 11(1)(a) of the Act. Therefore in the present case, the disallowance of Rs. 10,15,818/- which was spent outside India on account of boarding and lodging local transport etc. cannot be considered as application income as per Section 11(1)(a) of the Act. Assessee has not even produced any iota of evidence/materials before the AO/CIT(A) or before us to suggest that the assessee has received foreign contribution as per law to meet the expenditure incurred by the assessee for boarding and lodging, local transport etc. outside India. Therefore we are not in a position to uphold the theory of reimbursement taken by the Assessee. Thus Order passed by the Ld. CIT (A) is just and proper, which requires no interference, accordingly we dismiss the Grounds No. 1 to 3 of the assessee. - I.T.A. No. 4517/DEL/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-13 onwards till it is rescinded. The object of the society claimed to be chargeable in nature within the meaning of Section 2(15) of the Act and benefit u/s 11 12 are allowed to the assessee. During the year under consideration, the assessee society incurred expenses to the tune of Rs. 21,54,776/- on account of foreign travel and claimed it as application of income during the year. During the assessment proceedings the assessee has been given the opportunity to justify and substantiate the nature of foreign travel and purpose of the visit with supporting documents. In reply, assessee submitted the details of visit, but failed to substantiate it with supporting documents stating that the Office of the Society has already been closed . The reply of the assessee found not satisfactory by the A.O. Therefore, disallowed the foreign expenses of Rs. 21,54,776/- and passed assessment order dated 22/12/2016. As against the assessment order dated 22/12/2016, the assessee has preferred an appeal before the CIT(A). The Ld.CIT(A) vide order dated 02/04/2018, disallowed the expenditure amount to Rs. 10,15,818/- which was spent outside India on account of boarding and lodging local transpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision as it existed prior to 1-4-1952, there was no difference maintained between application of the income of the trust within or without the taxable territories. The provision as it existed after the amendment made with effect front 1-4-1952 makes a reference to application or accumulation for application of the income of the trust to such religious of charitable purposes as revenue to anything done within the taxable territories'. The assessee contended that the words 'as relate to anything done within the taxable territories' clearly show that the charitable purposes must be executed within the taxable territories and that it was immaterial where the income is actually applied. It is difficult to conceive of a situation under which the charitable purposes are executed within the taxable territories but the income of the trust is applied elsewhere in the implementation of such purposes. Be that as it may, the position is put beyond doubt by the proviso to section 4(3) (i) of the old Act. It says that the income of the trust shall stand included in its total income if it is applied to religious or charitable purposes throughout/within the taxable territories. The pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he words 'to such purposes in India . It answers three questions which would arise in the mind of the reader: apply what? Applied to what? And where? The answers would then make the meaning obvious. The answer to the first question would be apply the income of the trust. The answer to the second question will be applied to charitable purposes. The answer to the third question will be applied in India. Thus even grammatically speaking it scents that the group of words 'to such purposes in India' qualifies the preceding verb 'applied'. It is a case of a verb being qualified by two prepositions which follow, viz 'to' and 'in'. So read, it seems clear that grammatically also it would be proper to understand the requirement of the provision in this may, that is, that the income of the trust should be applied not only to charitable purposes, but also applied in India to such purposes. The submission of the assessee that the words 'in India' qualify only the appear to be the natural and grammatical way of construing the provision. That would break or clog the natural flow of the entire group of words 'To the extent to which such income is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le or religious trust created before die aforesaid date to seek such a order from CBDT in respect of its income which is applied to charitable or religious purposes outside India. It was further held that the words in India appearing in section ll(l)(a) and the words outside India appearing in section 11(l)(c) qualified the word applied appearing in these provisions and not the words said purposes. 8. Thus, it is well settled law that the expenditure incurred by the trust outside India cannot be considered as application of income as per Section 11(1)(a) of the Act. Therefore in the present case, the disallowance of Rs. 10,15,818/- which was spent outside India on account of boarding and lodging local transport etc. cannot be considered as application income as per Section 11(1)(a) of the Act. 9. The Ld. Counsel for the assessee submitted that, the disallowance of Rs. 10,15,818/- sustained by CIT(A), will result in addition of the amount twice to the gross total income of the assessee, once through foreign contribution received reimbursed amount is already included in the total income and in a second time by disallowance made in the assessment order, therefore submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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