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TMI Blog2013 (4) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 4309/Mum/2005 - - - Dated:- 30-4-2013 - Shri Rajendra Singh, Accountant Member and Shri Vivek Varma, Judicial Member Department By. Shri Pavan Ved Assessee by: Shri F.B. Andhyarujina O R D E R Per Rajendra Singh, A.M. This appeal by the assessee is directed against the order dated 4.2.2005 of CIT(A) for the assessment year 2001-02. The only dispute raised by the assessee in this appeal is regarding allowability of statutory accumulation of income at the rate of 25% of gross total income by the assessee. 2. The facts in brief are that the assessee trust which was registered u/s 12A of the IT Act had shown income from voluntary contributions at ₹ 316013264/-. The assessee had also received income from house property of ₹ 58208560 and after deducting expenses of ₹ 1,97,62,715/-, net income from house property had been shown as ₹ 3,94,45,845/-, The assessee had also received miscellaneous income of ₹ 5,62,992/-. The total income received was then ₹ 35,60,82,101/- against which the assessee had incurred expenses on the objects of trust at ₹ 34,27,58,555/-. The assessee had also incurred capital expenditure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. It was also submitted that such statutory accumulation allowable to the assessee was absolute and unfettered as held by Hon ble Supreme Court in case of CIT Vs. ALN Rao Charitable Trust (129 ITR 20J). Reference was also made to the judgment of Hon ble High Court of Bombay in case of CIT Vs Trustees of Bhat Family Research Foundation ( 185 ITR 532) for the proposition that statutory accumulation of 25% u/s 11(1)(a) was unqualified and unconditional. The learned AR further submitted that such accumulation of 25% of the gross income has been allowed by the Tribunal in assessee s own case in assessment year 2005-06 in ITA no. 1588/Mum/2000. The said decision of Tribunal was followed in assessee s own case in assessment years 97-98 and 98-99 in ITA nos. 345 346/Mum/2001 and also in the assessment years 2002-03 2003-04 in ITA nos. 3008- 3009/Mum/2006. It was further submitted by the learned AR that claim had also been allowed by CIT (A) in the order dated 22-9-2008 in the assessment year 2004-05 following the decision of Tribunal in assessment years 97-98 and 98-99 (Supra) and the judgment of Hon ble Supreme Court in case of CIT Vs. Programme for Community Organisation (Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the gross income of ₹ 2,57,376/- or the net income of ₹ 87,016/-. The Hon ble Supreme Court held that accumulation had to be computed with respect to gross income. There was no issue before the Hon ble Supreme Court as to whether accumulation had to be allowed or not even if the entire income had been applied and nothing had been left during the year. 5.1 The learned AR for the assessee has argued that accumulation u/s 11(1)(a) was absolute and unfettered irrespective of the fact whether some income was left for application or not. Reliance has been placed on the judgment of Hon ble Supreme Court in case of additional CIT Vs. ALN Rao Charitable Trust (Supra) and on the judgment of Hon ble High Court of Bombay in case of CIT Vs. Trustees of Bhat Family Research Foundation (Supra). We have carefully perused the said judgments but do not found any ruling to the effect that accumulation u/s 11 (1) (a) has to be allowed even if the entire income has already been applied during the year. In case of additional CIT Vs. ALN Rao Charitable Trust (Supra) the issue was whether conditions prescribed u/s 11(2) have to be fulfilled even in respect of accumulation mentioned in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come had already been applied. 5.3 As regards, the decisions of Tribunal in assessee s own case, we find, that in Assessment year 2005-06, the Tribunal in ITA no 1588/Mum/2000 in assessee s own case allowed the claim of the application with respect to gross income even when there was no income left for application, following the decision of special bench of Tribunal in case of Bai Sonabai Hirji Trust Vs. ITO (85 TTJ 907). The Tribunal had not discussed the issue as to whether accumulation can be allowed even if there is no income left. However, on perusal of decision of special bench of Tribunal (Supra) we find, that the issue in the case was not whether the accumulation can be allowed even if the entire income has already been applied. The issue was whether the percentage of accumulation had to be computed with respect to the gross income or net income. Thus the Tribunal in the assessee s own case in assessment year 2005-06 has allowed the claim of the assessee without any discussion on the issue and under the impression that the issue had been decided by the special bench of Tribunal (Supra). in case of Bai Sonabai Hirji Trust Vs. ITO The decision was thus based on incorrect a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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