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TMI Blog2020 (2) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... hargeable to tax in the hands of the assessee. Carry forward of excess of expenditure over income for the year - claim of the assessee is that if there is a deficit during one assessment year it should be allowed to be carried forward to the next assessment year as the deficit of the earlier years is allowable as application of income in subsequent years - AO and CIT-A denied claim - HELD THAT:- Hon ble Bombay High court has dismissed the appeal of the Revenue in DIT(E) v. Gem Jewellery Exports Promotion Council [ 2011 (9) TMI 1178 - SC ORDER] on the issue of set off of deficit of earlier years against surplus of the impugned assessment year. Further Hon ble Courts/Tribunal had taken consistent stand that in case of Charitable Trust excess expenditure over income is to be allowed to be carried forward for setting off against income of subsequent years. Thus the deficit of this year is allowable to assessee for set off in subsequent years. Therefore, we allow the carry forward of excess expenditure over income to be carried forward to subsequent years . Thus, we reverse the orders of lower authorities and allow ground no 2 of the appeal. - ITA No. 6334/Del/2016 (Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be granted deduction at the rate of 30 % from the rental income. Assessee relied upon the decision of coordinate bench in 68 TTJ 44. The AO rejected the contention of the assessee and therefore the above addition was made. Further assessee has shown loss of ₹ 1 407083 being excess of expenditure over income and asked for its carry forward to be set off in the subsequent year. Assessee was therefore aggrieved with the order of the learned assessing officer in computing the total income of the assessee at Rs. nil. 4. Therefore assessee aggrieved with the order of the learned assessing officer preferred an appeal before the learned CIT A. The learned CIT A dismissed the appeal of the assessee. 5. The assessee has challenged in the first ground of appeal the non-granting of deduction under section 24 (a) being 30% of deduction on rental income from house property. The learned authorised representative reiterated the submissions made before the lower authorities. According to him as per the provisions of the income tax act the charitable trust is eligible for such deduction and the lower authorities of disallowed the same innovate manner without considering the submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been decided against the assessee by observing as under: 3.2 The first issue arising in the instant appeals is the validity in law of the assessee's claim toward repairs and maintenance u/s. 24 of the Act in computing the income from house property let out assesse, and toward which it has (subsequently) a single precise ground. The claim is, by all counts, without merit. This is for the simple reason that the income of a charitable trust or institution, subject to its application for charitable purposes, for which it has been in fact formed (per its Constituting charter) is exempt from tax under Chapter III (ss.10 to 138) of the Act The said income does not form part of the total income of the entity to which it arises or accrues or is received by. It is only the income forming part of the total income u/s. 2(45) of the Act, which is to be classified under the various heads of the income u/s. 14 and, accordingly, subject to the computation provisions of Chapter IV (ss. 14 to 59)of the Act. The expenditure incurred in earning the same is, likewise, and only understandably, not to be taken into account in computing the total income under the Act, which represents trite law, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have been applied for charitable purposes, and which, therefore, has to be computed in the commercial sense. The said Circular has been found by the hon'ble courts of law as representing the correct interpretation of the relevant provisions and the requirement of the la w, as in the case of CIT vs. Programme for Community Organisation [1997] 228 ITR 620 (Ker), since approved by the apex court (reported at [2001] 248 ITR 1 (SC), to which (latter) decision reference stands also made by the Id. CIT(A). This aspect of the matter, i. e., the manner of computation of income of a charitable or religious trust/institution which has to be applied for the said purposes, has been a subject matter of a number of decisions, as by the hon'ble jurisdictional High Court in the case of CIT vs. Institute of Banking Personnel Selection (IBPS) [2003] 264 ITR 110 (Bom). This is even otherwise patent inasmuch as a trust could only apply the income as available with it, i.e., as arrived at following the accepted principles of commercial accounting. The computation provisions of the Act do not come into play, so that the said computation of the would be de hors the same. This would of course be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Society v. DIT (Exemption) (in IT A No. 575/Bang./2011 dated 28/9/2012, also at [2012] 26 taxmann.com 250 (Bang.)) is again only in respect of the specific provision of sec. 11(1 A) of the Act, i.e., qua capital gain, and, thus, not applicable. We have already clarified that our decision is based on and represents the general position of law, so that it would be subject to the specific provisions of the Act, giving example of ss. 11(4) and 11(4A). It may be relevant to state that the decision by the apex court in Harprasad Co. (P.) Ltd. (supra), referred to earlier, is also in respect of capital gains. 9. No contrary decision was brought to our notice by the learned AR. In view of this fact, we confirm the order of the CIT(A) disallowing the claim of the assessee u/s. 24(a) of the Act. Thus, the ground taken by the assess fails. 7. In this view of the matter and consistent with the view taken by the co-ordinate bench, we are of the considered view that there is no error in the orders of authorities below and hence, we are inclined to uphold the findings of Ld.CIT(A) and reject ground taken by the assessee. Therefore, respectfully following the decision of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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