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TMI Blog2015 (12) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... found that trust is entitled to exemption under s. 11(1), we are to go to the stage of income before application thereof. Thus the accumulation u/s 11(1)(a) of the Act should be allowed as claimed by the Assessee - Decided in favour of assessee. - ITA No. 367/Bang/2015 - - - Dated:- 9-10-2015 - Asha Vijayaraghavan, JM And Jason P. Boaz, AM For the Petitioner : Shri V Srinivasan, CA For the Respondent : Shri Sunil Kumar Agarwala, Jt.CIT ( DR ) ORDER Per Asha Vijayaraghavan, Judicial Member This appeal by the assessee is against the order dated 19.01.2015 of the CIT(Appeals)-14, LTU, Bangalore relating to ay 2011-12. 2. The assessee is a public charitable cum public religious institution registered under the Mysor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived and utilized for rendering charitable/religious activities free of cost and there was no income generating activity performed by the assessee. 7. The assessee also referred to earlier ruling of the Hon'ble Supreme Court in the case of S.R.M. M.C.T.M. Tiruppani Trust vs Commissioner of Income Tax (1998) reported in 230 ITR 636 (SC) and Commissioner of Income Tax vs ALN Rao Charitable Trust (1995) reported in 216 ITR 697 (SC) which have dealt with this issue wherein it was held that the deduction or exclusion on account of accumulation of income under section 11(1)(a) of the Income Tax Act is to be granted at 25% (now reduced to 15%) of the gross receipts or 25% (now reduced to 15%) of the income from property held under trust. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h as donation etc., and treat the accumulation in the former in terms of net receipt and in the latter in terms of gross receipts. In view of this discussion, the grounds raised are partly accepted. 9. Aggrieved, the assessee is in appeal before us on the following grounds:- 1. The orders of the authorities below in so far as they are against the appellant are opposed to Law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The Learned CIT[A] is not justified in upholding the action of the Learned Assessing Officer in not granting the accumulation of Income u/s.11[1][a] of the Act at 15% of the income from property held under trust as against a sum of ₹ 30,62,529/- claimed by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s receipts. The AO was of the view that accumulation will be allowed only to the extent of 15% of the income after revenue expenditure. In other words income to be set apart u/s.11(1)(a) of the Act has to be computed at 15% of the net income i.e., gross receipts minus revenue expenditure and not on the gross receipts as claimed by the Assessee. Since in the case of the Assessee, the gross receipts after revenue expenditure was nil, the AO denied the benefit of accumulation to the Assessee. 16. On appeal by the Assessee, the CIT(A) confirmed the order of the AO. Hence ground No-4 raised by the Assessee before the Tribunal. 17. The issue to be decided is therefore as to whether for the purpose of computing accumulation of income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mme for Community Organization (supra). In the decision, their Lordships, after taking note of provisions of sec. 11(l)(a), have held as under: Having regard to the plain language of the above provision, it is clear that a charitable or religious trust is entitled to accumulate twenty-five per cent of its income derived from property held under trust. For the present purposes, the donations the assessee received, in the sum of ₹ 2,57,376, would constitute its property and it is entitled to accumulate twenty-five per cent thereout. It is unclear on what basis the Revenue contended that it was entitled to accumulate only twenty five per cent of ₹ 87,010. For the aforesaid reasons, the civil appeal is dismissed. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of exemption under s. 11(1), the said trust is to get the benefit of twenty-five per cent and this twenty-five per cent has to be understood as income of the trust under the relevant head of s. 11(1). In other words, income that is not to be included for the purpose of computing the total income would be the amount expended for purposes of trust in India. Their Lordships in the above case have emphasized on the clear and unambiguous language of s. 11(1)(a) and decided the matter on the basis of the same. It has been held that as per the statutory language of the above section the income which is to be taken for purpose of accumulation is the income derived by the trust from property. If both the decisions are carefully read, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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