2013 (9) TMI 1229 - AT - Income Tax

Summary

Issues involved: Appeal against order of CIT(A) allowing carry forward of deficit and set off against income of subsequent years, interpretation of provisions u/s 11(2) of Income Tax Act, 1961.

Summary:
The Revenue appealed against the CIT(A)'s decision allowing the carry forward of deficit and set off against subsequent years' income for A.Y. 2007-08. The assessee, a charitable trust, claimed set off of deficiency of earlier years against current year's income. The AO contended that there is no provision for carry forward of expenditure, only for income u/s 11(2) of the Act. The assessee argued citing decisions of Hon'ble Bombay High Court and Hon'ble Gujarat High Court that excess expenditure can be carried forward and adjusted against current year's income. The CIT(A) accepted the assessee's contention, directing the AO to verify and allow the balance loss to be carried forward. The Revenue, aggrieved by the CIT(A)'s order, argued that without clear statutory prescription, the AO was justified in rejecting the claim. However, the ITAT upheld the CIT(A)'s order, noting that the Revenue did not challenge the decisions cited and dismissed the appeal.

The ITAT held that the order of the CIT(A) allowing the carry forward of deficit and set off against subsequent years' income was justified based on the decisions cited and the absence of a direct contrary decision challenged by the Revenue. The ITAT found no reason to interfere with the CIT(A)'s order and dismissed the Revenue's appeal, upholding the decision of the CIT(A).