9911796707
TMI Blog2015 (11) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... l precedents on the issue and the same is allowable. To satisfy the requirements of section 11(2)(b) of the Act, the investment must necessarily come out of current year’s income and the investment made in the past obviously cannot satisfy the requirements for the current year. We are, therefore, inclined to follow the view taken by the co-ordinate benches of this Tribunal, inter alia, in the case of Baldwin Methodist Educational Society (2015 (10) TMI 2416 - ITAT BANGALORE), based on the view/decisions of the Hon'ble Bombay High Court in the case of Institute of Banking (2003 (7) TMI 52 - BOMBAY High Court) and the Hon'ble Gujarat High Court in the case of CIT V Shri Plot Swetamber Murti Pujak Jain Mandal reported in [1993 (11) TMI 17 - GUJARAT High Court]. In this view of the matter, the Assessing Officer is directed to allow carry forward of the excess application for the year to be adjusted from income from property held under trust of the subsequent years. - Decided in favour of assessee. - I.T.A. No.312/Bang/2015 - - - Dated:- 24-9-2015 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER For The Appellant : Shri V. Srinivasan, C.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the commercial principles for assessment of income of charitable institutions. It was prayed that the deficit determined by the Assessing Officer ought to be carried forward. The learned CIT (Appeals), however, did not agree with the contentions of the assessee. The learned CIT (Appeals) proceeded to hold that there was no provision under the Act to carry forward the excess application of income by charitable trusts to be regarded as / for application of income in the later years. In coming to this conclusion, the learned CIT (Appeals) relied upon the judgment of the Hon'ble High Court of Delhi in the case of CIT V. Indian National Trust (305 ITR 149) and the decision of the ITAT, Mumbai Bench in the case of Trustees of Sri Satya Sai Trust (33 ITD 320). The learned CIT (Appeals), accordingly, declined to allow the carry forward of deficit claimed by the assessee and dismissed the assessee's appeal vide order dt.20.1.2015. 3. Aggrieved by the order of the CIT (Appeals)-14, LTU, Bangalore dt.27.10.2014 for Assessment Year 2007-08, the assessee has preferred this appeal before the Tribunal raising the following grounds :- 1. The orders of the authorities below in so f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT V Institute of Banking (264 ITR 111) and the decision of the co-ordinate benches of this Tribunal in the cases of Baldwin Methodist Education Society in ITA No.523/Bang/2014 dt.31.3.2015 and St. Francis Sales Educational and Charitable Trust in ITA No.365/Bang/2014 dt.10.7.2015 in support of the proposition put forth by him. 5.2 Per contra, the learned Departmental Representative supported the orders of the authorities below. He submitted that the Hon'ble High Court of Delhi in the case of Indian National Theater Trust (supra) has held that accumulation of income should be only out of the current year s income. The learned Authorised Representative submitted that in view of the above, the impugned orders passed by the learned CIT (Appeals) is justified and no interference is called for thereon. 5.3.1 We have heard the rival contentions of both parties and perused and carefully considered the material on record; including judicial pronouncements, cited and placed reliance upon. We find that the case of Institute of Banking (supra), the Hon'ble High Court of Bombay has held as under :- Now coming to question No. 3, the point which arises for consideration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Academy of Liberal Education in ITA No.687/Bang/2014 dated 20/2/2015, to which one of us i.e. the Accountant Member is the signatory, has considered this issue and in para.8 of its order, held as under: 8. We are of the view that pendency of an appeal before the Hon'ble High Court of Karnataka cannot be the basis not to follow the decision on the issue already rendered in identical cases. Section 11(1)(a) does not contain any words of limitation to the effect that the income should have been applied for charitable or religious purpose only in the year in which the income has arisen. The application for charitable purposes as contemplated in section 11(1)(a) takes place in the year in which the income is adjusted to meet the expenses incurred for charitable or religious purposes. Hence, even if the expenses for such purposes have been incurred in the earlier years and the said expenses are adjusted against the income of a subsequent year, the income of such subsequent year can be said to be applied for charitable or religious purposes in the year in which such adjustment takes place. In other words, the set-off of excess of expenditure incurred over the income of earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture on religious and charitable purposes and no other. The High Court relied on the decision in the case of CIT Vs. Society of Sisters of ST. Anne 146 ITR 28 (Kar). We find that the order of the CIT(A) is in consonance with the judicial precedents reproduced above. Therefore, we see no reason to interfere with the order of the CIT(A). The revenue s appeal is, accordingly, dismissed. 5.3.3 It is clear from the relevant portions of the aforesaid decisions of the Hon'ble High Court of Bombay (supra) and the co-ordinate bench of the ITAT, Bangalore (supra) extracted above that the income of charitable trusts is required to be computed on commercial principles. The concept of application of the income for the year in which the income has arisen is not found in Section 11(1)(a) of the Act. No limitation to the above effect is found in the language of the section. It merely requires application of the income that has arisen from the property held under trust. In this view of the matter, the principles relating to set off of losses, etc. is not of any relevance and therefore any excess application of income during the year can be regarded as application of the income of futu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
