9911796707
TMI Blog1997 (1) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in the circumstances of the case, the Appellate Tribunal was correct in construing the amount of Rs. 42,243 as being part of the amount of Rs. 6,50,000 which the assessee had mentioned in Form No. 10 under rule 17 of the Income-tax Rules, 1962, as being accumulated or set apart under section 11(2) of the Income-tax Act, 1961? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has not erred in holding that the accumulated income in respect of which the conditions under sub-section (2) of section 11 are satisfied will be entitled to exemption over and above 25 per cent. of the income which is allowed to be accumulated under sub-section (1) of that section without losing exemption ? (3) Whether, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 42,243 shown in item No. (3) on the ground that the assessee-trust had not exercised its option under the Explanation to section 11(1) of the Income-tax Act, 1961, in writing as prescribed in that provision. He, however, under the mistaken impression that this amount was also included in the sum of Rs. 4,66,307 shown against item No. (2), deducted the said amount therefrom erroneously. The total income was determined as Rs. 69,342 in this manner. On appeal, the Commissioner of Income-tax (Appeals) noticed the mistake referred to in the earlier paragraph, allowed the appeal to that extent, confirming the other findings of the Income-tax Officer. In the result, the total income was reduced to Rs. 27,099 from Rs. 69,342. Thereafter the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income which was allowed to be accumulated under sub-section (1) of section 11 without losing exemption, following the decision of the Karnataka High Court in the case of Addl. CIT v. A. L. N. Rao Charitable Trust [1976] 103 ITR 44, 51. (iv) The option to be exercised under the Explanation to section 11(1) need not be in the form of a separate letter and that Rs. 25,099 along with Rs. 2,000 spent in the three succeeding months after the end of the previous year for charitable purposes should be considered as application of income within the meaning of the Explanation to section 11(1) of the Income-tax Act, 1961." We have heard learned junior standing counsel appearing for the Department as well as learned counsel Mr. P. P. S. Janarth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumulated income, which has still not earned exemption under sub-section (1)(a). So far as that balance of accumulated income is concerned, that also can earn exemption from income-tax, meaning thereby the ceiling or the limit of exemption of accumulated income from income-tax as imposed by sub-section (1)(a) of section 11 would get lifted, if the additional accumulated income beyond 25 per cent. or Rs. 10,000, whichever is higher, as the case may be, is invested as laid down by section 11(2) after following the procedure laid down therein." So far as the order relating to question No. (2) is concerned, it is in accordance with the judgment of the Supreme Court cited supra. Therefore, no referable question of law as framed and suggested as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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