TaxTMI 
TaxTMI 
2012 (4) TMI 289
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....ber, 2005 for grant of registration under Section 12A of the Income Tax Act, 1961 („Act‟ for short). Registration was applied for from the date of incorporation of the society. The application was, however, rejected by the Director of Income Tax (Exemption), Delhi vide order passed on 22nd August, 2006 under Section 12AA(1)(b) of the Act. The registration was rejected not only for the past assessment years but also for the assessment year 2006-07 which is the year in question before us. 2. The assessee appealed to the Income Tax Appellate Tribunal („Tribunal‟ for short) against the order refusing registration and the Tribunal vide its order dated 25th May, 2007 set aside the order of the refusal of registration an....
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.... gains of the business. Since the assessee itself had admitted vide its letter dated 26th November, 2008 that no specific expenses were incurred for earning the income, the Assessing Officer was not in a position to allow any deduction on account of the expenses. However, accepting the position that some expenditure would have necessarily been incurred for earning the income, the Assessing Officer estimated the same at Rs.1 lac per month and thus allowed an expenditure of Rs.12 lacs against the gross receipts of Rs.12,44,11,646/- and arrived at the net taxable income of Rs. 12,32,11,650/-. 6. The assessee appealed to the CIT(Appeals) questioning the refusal of the Assessing Officer to allow exemption under Section 11 of the Act in respec....
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....the claim of depreciation has to be allowed since the income of the trust should be computed on the basis of commercial principles. In support of the claim, reliance was placed by the assessee on the following authorities:- 1) Commissioner of Income Tax v. Sheth Manilal Ranchhoddas Vishram Bhavan Trust (1992) 198 ITR 598 (Gujarat) 2) Commissioner of Income Tax v. Raipur Pallottine Society (1989) 180 ITR 579 (M.P.) 3) CIT vs. Society of the Sisters of St. Anne (1984) 146 ITR 28 (Kar.) 8. It was further pointed out that the claim of depreciation had been allowed by the Assessing Officer himself in the assessments for the assessment years 2003-04, 2004-05 and also for the assessment year 2007-08 for which year ....
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....d that the CIT(Appeals) was wrong in allowing the depreciation. The Tribunal referred to the fact that the decision of the CIT(Appeals) to allow the depreciation was based on several authorities including some orders of the Delhi Benches of the Tribunal and felt bound by those orders. Accordingly the decision of the CIT(Appeals) was confirmed and the appeal of the revenue was dismissed vide order dated 13th May, 2011. 11. The revenue is in appeal against the aforesaid order of the Tribunal. We are not inclined to admit the appeal and frame any substantial question of law since none arises from the order of the Tribunal. There is no dispute that the assessee has been granted registration under Section 12AA vide order dated 11th Sep....
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.... No.5-P (LXX-6) of 1968, dated July 19,1968 was reproduced in the judgment in which the Board has taken the view that the income of the trust should be understood in its commercial sense. The circular is as under:- "Where the trust derives income from house property, interest on securities, capital gains, or other sources, the word 'income' should be understood in its commercial sense, i.e., book income, after adding back any appropriations or applications thereof towards the purpose of the trust or otherwise, and also after adding back any debits made for capital expenditure incurred for the purposes of the trust or otherwise. It should be noted, in this connection, that the amounts so added back will become chargeable to tax u/s. 11(3) to....
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....cannot be applied to the present case. Firstly, the Supreme Court was not concerned with the case of a charitable trust/institution involving the question as to whether its income should be computed on commercial principles in order to determine the amount of income available for application to charitable purposes. It was a case where the assessee was carrying on business and the statutory computation provisions of Chapter IV-D of the Act were applicable. In the present case, we are not concerned with the applicability of these provisions. We are concerned only with the concept of commercial income as understood from the accounting point of view. Even under normal commercial accounting principles, there is authority for the proposition that....