2019 (3) TMI 1572

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssistant Commissioner of Income Tax, Circle-6, Surat(in short "the AO") dated 19.03.2013 under section 143(3) of Income Tax Act,1961 (in short 'the Act'). 2. The Revenue has raised following grounds of appeal : "i) The Ld. Commissioner of Income-Tax (Appeals) has erred in law and on facts in deleting the addition of Rs. 7,64,805/- being disallowance of accumulation of income @ 15% of gross total income of Rs. 50,98,703/- . ii) The Ld. Commissioner of Income-tax (Appeals)has erred in law and on facts in deleting the disallowance of amount set apart for specified purpose of Rs. 81,16,651/-. iii) The Ld. Commissioner of Income-Tax (Appeals) has erred in law and on facts in ignoring the stand of the Revenue that allowance of depreciati....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....wards to object of the Trust. However, the AO noted that there is deficit of Rs. 46,14,840/- (i.e. excess of expenditure over income) to be carried forward and set-off in subsequent year, therefore, no question arises of accumulation of 15% of the total income earned by the assessee during the year, hence, the deduction claimed of Rs. 7,64,805/- was added to the total income of the assessee. 5. The assessee carried the matter before the CIT(A) wherein same facts were reiterated. The CIT(A) observed that the assessee disclosed income from other sources at Rs. 52,92,614/- as against application of income shown at Rs. 99,07,454/-. Thus, there is excess of expenditure over income Rs. 46,14,840/-. However, the AO has not given any opinion of hi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t ld.CIT(A) has perfectly deleted the said addition, therefore this ground of appeal is dismissed. 9. Ground No.ii), iii) & iv) are against the deleting the disallowance of amount set apart for specified purposes of Rs. 81,16,651/- and disallowance of expenditure of Rs. 27,32,915/- which are co-related, hence being considered together. 10. Brief facts are that the AO observed that the assessee had set apart or accumulated the amount of Rs. 81,16,651/- u/s.11(2) of the Act but this was not shown to the AO by furnishing Form No.10. The AO, therefore disallowed this amount the same. The AO further observed that the assessee has made expenses of Rs. 27,32,915/- from the year marked funds (corpus fund) which is not allowable. The reply of the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....izing the donations towards the corpus of such specific funds of the appellate Trust. Therefore, it is clear from the provision of section 11(1)(d) of the Act that voluntary contributions made towards corpus of the Trust are not to be included in the income of the Trust. Thus, if a donor while making the donations make it clear that the donation so made shall form part of the corpus of the Trust, it would be capital receipts and shall be chargeable to tax. Consequently, the provisions related to accumulation of income and setting apart of that would not apply in such cases. In view of these facts, the CIT(A) concluded that the judgment relied by the AO in the assessment order become irrelevant to the case of the appellant. With regard to ex....