2012 (3) TMI 462 - AT - Income Tax

Tribunal Upholds CIT(A) Decision Allowing Charitable Trust's Deficit Carry Forward

The Tribunal upheld the decision of the ld. CIT(A) in favor of the charitable trust, allowing the carry forward of deficit claimed by the trust. The ... - Issues involved: Appeal against order for Assessment Year 2007-08 regarding carry forward of deficit by a charitable trust u/s 11 of the Income Tax Act, 1961.Summary:The appeal was filed by the Revenue against the order of the ld. CIT(A) for the Assessment Year 2007-08 concerning the carry forward of deficit by a charitable trust. The trust, registered under section 12A of the Income Tax Act, claimed a deficit of &8377; 1,72,94,315 which the AO computed as Nil income. The ld. CIT(A) directed the AO to allow the carry forward of the deficit to the trust based on the decision of the Hon'ble Bombay High Court in CIT V/s Institute of Banking Personnel Selection (2003) 264 ITR 110 (Bom).The Revenue raised grounds challenging the allowance of the claim for carry forward and set off of deficit, arguing that no such provisions exist in the Income Tax Act. They also contended that capital expenditure should not be debited to the income and expenditure account, and the principle of not allowing more than one deduction for the same outgoing should be applied. Additionally, they questioned the applicability of the decision in Institute of Banking Personnel case as it was not contested before the Supreme Court.During the hearing, both parties agreed that the issue was in favor of the assessee based on the decision of the Hon'ble Jurisdictional High Court. The Tribunal considered the submissions and referred to a judgment of the Punjab and Haryana High Court, which supported the assessee's position. It was concluded that there was no double deduction claimed by the assessee, and the ld. CIT(A) was justified in allowing the claim. Consequently, the Revenue's appeal was dismissed.In conclusion, the Tribunal upheld the decision of the ld. CIT(A) in favor of the charitable trust, emphasizing that no double deduction was claimed, and the grounds raised by the Revenue were rejected.