2016 (12) TMI 1761 - HC - Income Tax

Application of income u/s. 11(1)(a) - corpus donation u/s. 11(1)(d) - carry forward of deficit on account of excess expenditure and directed the assessing officer to allow carry forward of deficit on account of excess expenditure - corpus donation u/s. 11(1)(d) - Held that - Issues arising herein stands concluded against the Revenue and in favour of the Assessee by the decision of this Court in CIT v/s. Institute of Banking 2003 (7) TMI 52 - BOMBAY HIGH COURT . The questions as proposed do not give rise to any substantial questions of law.

Summary

Issues:
1. Allowance of claim for carry forward of deficit under the Income Tax Act, 1961.
2. Justification of upholding the decision of the CIT(A) regarding carry forward of deficit on account of excess expenditure.

Issue 1: Allowance of claim for carry forward of deficit under the Income Tax Act, 1961:
The High Court addressed the challenge to the order passed by the Income Tax Appellate Tribunal (the Tribunal) related to the Assessment Year 2009-10. The Revenue raised a question of law regarding the allowance of the claim for carry forward of a deficit amounting to ?3,71,99,050 by the assessee. The Tribunal allowed the claim despite the absence of an express provision in the Income Tax Act, 1961 for such allowances. The Revenue contended that granting such claims would result in a double benefit to the assessee, which was legally impermissible. However, Mrs. Bharucha, representing the Revenue, acknowledged that the issues were settled in favor of the Respondent-Assessee based on a previous decision of the Court. Consequently, the Court found that the proposed questions did not present any substantial questions of law and dismissed the appeal.

Issue 2: Justification of upholding the decision of the CIT(A) regarding carry forward of deficit on account of excess expenditure:
The second question of law raised by the Revenue pertained to the justification of upholding the decision of the CIT(A) regarding the carry forward of deficit on account of excess expenditure. The Revenue argued that allowing such carry forwards would lead to a double benefit for the assessee, which was not legally permissible. However, Mrs. Bharucha, the Counsel for the Revenue, conceded that the issues were settled in favor of the Respondent-Assessee based on a previous decision of the Court. Consequently, the Court found no substantial questions of law in this regard and dismissed the appeal without any order as to costs.

In conclusion, the High Court, in its judgment, dismissed the appeal challenging the order of the Tribunal related to the Assessment Year 2009-10. The Court found that the issues raised by the Revenue regarding the allowance of claims for carry forward of deficits were settled in favor of the Respondent-Assessee based on previous decisions. As a result, the Court did not find any substantial questions of law in the matter and upheld the decision of the Tribunal and CIT(A) regarding the allowance of such claims.