2000 (11) TMI 4 - SC - Income Tax

Assessee-trust received donations in the aggregate sum of Rs. 2, 57, 376. It applied thereout for its charitable purposes the aggregate sum of Rs. 1, 70, 369 leaving a balance of Rs. 87, 010 - it is clear that a charitable/religious trust is entitled to accumulate 25% of its income derived from property held under trust -the donations the assessee received in the sum of Rs. 2, 57, 376 would constitute its property and it is entitled to accumulate 25% thereout

Summary

The Supreme Court judgment dealt with the interpretation of Section 11(1)(a) of the IT Act regarding exemption for charitable trusts. The court ruled in favor of the assessee, stating that the trust is entitled to accumulate twenty-five percent of its total income for charitable purposes. The Revenue's contention that only twenty-five percent of a specific amount should be accumulated was dismissed.