2012 (7) TMI 252

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.... "The facts of the case are that the assessee is a charitable trust running a medical college as well as hospital. Return declaring Nil income was filed on 31.10.2006. During the course of original assessment proceedings it was gathered by the A.O. that the assessee had filed a revised return on 24.3.2008 wherein loss at Rs.5,83,85,975/- to be carried forward to A.Y. 2007-08. However, assessment was completed u/s 143(3) on 27.3.2008 at nil income wherein claim of loss was disallowed by the AO. Aggrieved with the order of the A.O. the assessee filed an appeal before CIT(A), Muzaffarnagar who vide order dated 13.10.2008 directed the A.O. to verify claim of loss and allow loss for carry forward. Against the order of the CIT(A), Muzaffarnagar,....

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....iation even when the entire cost of asset was allowed as deduction u/s 11...... It was held by the A.O. that the assessee failed to justify how the excess expenses or excess application of income could merit allowance of loss to the assessee. According to the A.O. the pith and substance of the matter was that the income from properties held under trust had to be arrived in normal commercial manner or as per provisions of Income Tax Act. Therefore, in the given circumstances the excess application could not be allowed to the assessee to be carried forward. The A.O. also relied on the recent decision of the Hon'ble ITAT, Delhi in the case of Pushpawati Singhania Research Institute of Liver, Renal & Digestive diseases vs. Dy.DIT(2009) 29 SO....

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....sion of the Hon'ble Supreme Court in the case of Escorts Ltd. And others vs. Union of India, 119 ITR 43 (S.C.). He chose to follow the decision of Cochi Bench of the Tribunal in the case of Dy.DIT(E) vs. Adishankara Trust, 12 Taxman, 105 Cochin, wherein the Tribunal followed another decision of the Coordinate Bench in the case of DIT(E) vs. Medical Institution Lissie. Aggrieved the assessee is in appeal on the following grounds. "1. That the Ld.CIT(A) has erred in sustaining the disallowance of brought forward and set off of loss holding the same to be a case of double deduction, although, the assessee has not claimed depreciation at all. Hence the entire discussion and findings of his order are rendered prejudicial and against the actua....

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....assessee to claim set off against the brought forward losses has put reliance upon the following decisions:- i. CIT vs. Matri Sewa Trust, 242 ITR 20 (Mad.); ii. CIT vs. Institute of Banking, 264 ITR 110 (Bom); iii. CIT vs. Maharana of Mewar Charitable Foundation, 164 ITR 439 & iv. Govindu Naicker Estate vs. ADIT, 248 ITR 368. 5. We have gone through the order of the CIT(A) in A.Y. 2001-02, 2003-04 and 2004-05. In those years, the assessee has been permitted to carry forward the losses and also to claim set off such losses against the income. The CIT(A) has made a reference in those A.Ys to s.11(4) of the I.T.Act. In the case of CIT vs. Institute of Banking reported in 264 ITR page 110 an argument was raised before the Hon'ble....