Section 11 accumulation under trust law is computed on gross receipts, not net income after application.

For section 11(1), the permissible 15% accumulation is computed on gross income or receipts derived from property held under trust, not on net receipts after application of income for charitable purposes. The Tribunal followed the Supreme Court's view and the assessee's prior year decision, holding that restricting the exemption to net receipts was unsustainable.

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Issues: Whether the assessee, a charitable society, was entitled to accumulation/exemption of 15% under section 11 on gross receipts or only on net receipts after application of income.

Analysis: Section 11(1) permits accumulation of a specified percentage of the income derived from property held under trust. The Tribunal followed the Supreme Court's view that the percentage is to be computed on the gross income/receipts and not on the balance remaining after application of income for charitable purposes. The assessee's own case for the immediately preceding assessment year had also taken the same view and directed allowance of 15% exemption on gross receipts.

Conclusion: The assessee was entitled to accumulation of 15% on gross receipts, and the restriction to net receipts was not sustainable.

Ratio Decidendi: For purposes of section 11(1), the permissible percentage of accumulation is to be calculated on gross income/receipts and not on net income after application of funds.

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