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TMI Blog2015 (7) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... ier years, if in the books of account of the trust such earlier expenditure had been set off against the income of the subsequent year. The expenditure that can be so adjusted can only be expenditure on religious and charitable purposes and no other. Also see Commissioner of Income-Tax Versus Institute Of Banking Personnel Selection [2003 (7) TMI 52 - BOMBAY High Court]. Thus we direct the AO to allow the assessee to carry forward the deficit of the income arising on account of excess application of income during the relevant financial year to the subsequent assessment years. - ITA No. 354/Bang/2015 - - - Dated:- 8-7-2015 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER and SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER Appellant by: Shri Sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Having regard to the rival contentions and the material on record, we find that similar issue had arisen before the Tribunal in the case of Baldwin Methodist Educational Society in ITA No.523/Bang/2014 for assessment year 2009-10 and C bench of this Tribunal to which both of us are signatories, had considered the issue at length and at para.5 of the order had held as under: We also find that A bench of this Tribunal in the case of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome for subsequent years and that depreciation is allowable on the assets the cost of which has been fully allowed as application of income under s. 11 in past years. In Govindu Naicker Estate vs. ADIT 248 ITR 368 (Mad), the Hon ble Madras High Court held that the income of the trust has to be arrived at having due regard to the commercial principles, that s. 11 is a benevolent provision, and that the expenditure incurred on religious or charitable purposes in earlier year or years can be adjusted against the income of the subsequent year. The principle that the loss incurred under one head can only be set off against the income from the same head is not of any relevance, if the expenditure incurred was for religious or charitable purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Hon ble Bombay High Court in the case of CIT vs. Institute of Banking (2003) 264 ITR 110 has held as under: Now coming to question No.3 the point which arises for consideration is whether excess of expenditure in the earlier years can be adjusted against the income of the subsequent year and whether such adjustment should be treated as application of income in the subsequent year for charitable purposes? It was argued on behalf of the Department that expenditure incurred in the earlier years cannot be met out of the income of the subsequent year and that utilisation of such income for meeting the expenditure of earlier years would not amount to application of income for charitable or religious purposes. In the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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