9911796707
TMI Blog2016 (3) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... on of income over the income. 3. Shri Deepak John, the Ld.counsel for the assessee, submitted that the assessee incurred an expenditure of Rs. 9,06,971.88 for the assessment year 2007-08. However, this was not allowed as application of income. Therefore, the assessee claimed for the year under consideration exemption under Section 11 of the Income-tax Act, 1961 (in short 'the Act'). The Ld.counsel further submitted that a sum of Rs. 15,06,371/- was deducted at source from the interest on fixed deposit in banks. The assessee claimed exemption and request for refund. However, the Assessing Officer rejected the claim of exemption under Section 11 and adjusted the TDS to the extent of Rs. 8,08,074/- against the demand raised. On a quer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. D.R., the assessee is eligible for exemption of the income which was applied for charitable purpose and also the income accumulated to the extent of 15% of the income from such property. The income accumulated by the assessee to the extent of 15% might have been allowed as exemption under Section 11of the Act. Therefore, there is no question of carry forward of the expenditure incurred by the assessee in the subsequent assessment year. Placing reliance on the decision of this Bench of the Tribunal in the Anjuman-E-Himayath-E-Islam v. ADIT (Exemptions) in I.T.A. No.2271/Mds/2014 dated 02.06.2015, the Ld. D.R. submitted that on identical set of facts, this Tribunal examined the possible source of income and found that the accumulated fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income' includes any "voluntary contribution received by the trust created wholly or partly of charitable or religious purposes". Further explanation to section-11(1)(a)(b) r.w.s 12(1) of the Act provides that any "voluntary contribution received other than with specific direction that they shall form part of the corpus of the trust or institution" created wholly for charitable or religious purpose shall be deemed to be the "income derived from property held under trust". From the above it is clear that, when the assessee trust applies 85% of its income received by way of "voluntary contributions other than the voluntary contributions received with specific directions" and the "income derived from property held under trust", then such incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32 ITR 535(SC) that "Property" is a term of the widest import, and subject any limitation or qualification which the context might require, it signifies every possible interest which a person can acquire, hold and enjoy. Business would undoubtedly be property unless there is something to the contrary in the enactment. ] When the Trust applies its funds from its Corpus, accumulated fund, Sundry creditors or from the loan obtained by the Trust, then such funds which are applied cannot be said to be funds applied from the income of the Trust. Therefore, there cannot be a case where the trust can apply its income more than the income received by it for the purpose of Section-11(1)(a)&(b) of the Act. Thus excess application of fund over and ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble Bombay High Court is also not placed before us. 4.6 Now analyzing the facts of the case before us, it appears that the assessee trust's gross receipts is Rs. 5,11,60,794/- and the assessee trust have spent Rs. 5,35,57,149/- which shows that the assessee trust has spent Rs. 23,96,355/- more than its income received during the relevant year. This amount of Rs. 23,96,355/- may have been taken out from the 'corpus funds', 'accumulated funds', 'loan' obtained by the assessee trust or arising out of 'Sundry Creditors'. Therefore it is obvious that there is no excess application of income over and above the income received by the trust, hence the question of carry forward of excess application of income does not arise. However the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.5 of the order of the Tribunal extracted above, the six sources of income as enumerated could be the only possible income. All the income would be entitled for exemption under Section 11 of the Act provided the same is applied for charitable activity. The assessee is also eligible to accumulate to the extent of 15% of income from such property. If any income, which could not be applied for charitable purpose and such income does not exceed more than 15%, then the Assessing Officer would have allowed the claim of the assessee in the year in which it was not utilized for charitable purpose. Therefore, it is for the assessee to explain before the Tribunal the income of the assessee for the earlier assessment year and what was applied for cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
