2017 (5) TMI 1564

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....s is an appeal filed by the revenue. The relevant assessment year is 2011-12. The appeal is directed against the order against the order of the Commissioner of Income Tax (Appeals)- 1, Mumbai and arises out of order u/s 143(3) of the Income Tax Act, 1961 (the 'Act'). 2. The grounds of appeal filed by the revenue read as under: i. Whether on the facts on the case and in law the Ld. CIT(....

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....e jurisdictional High Court on merit of the case. 3. Briefly stated, the facts of the case are that the assessee is a trust registered u/s 12A of the Act. It filed its return of income for the impugned assessment year on 30.09.2011 along with Form 10B declaring total income at Rs. Nil. The Assessing Officer (A.O.) completed the assessment u/s 143(3) on 10.02.2014 assessing the income at Rs. Nil....

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.... the earlier years can be adjusted against the income of the subsequent year and whether such adjustment should be treated as application of income in subsequent year for charitable purposes? It was argued on behalf of the Department that expenditure incurred in the earlier years cannot be met out of the income of the subsequent year and that utilization of such income for meeting the expenditure ....

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....not find any merit in this argument of the Department. Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the Trust for charitable and religious purposes in the earlier years against the income earned by the Trust in the subsequent year will have to be regarded as application o....