TaxTMI 
TaxTMI 
2018 (9) TMI 1968
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....assessee assailing the order of the CIT(A) has raised before us the following grounds of appeal: "1. Whether on the facts of the case and in the law the ld. CIT(A) erred in allowing the carry forward of deficit of Rs. 2,05,54,360/- and allowing set off against the income of the subsequent years. 2. Whether, on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing the claim of the assessee for carry forward of the said deficit, ignoring the fact that there was no express provision in the I.T. Act, 1961 permitting allowance of such claim. 3. Whether, on the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing the claim of the assessee for carry....
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....3,42,372/-, against the surplus for the year under consideration viz. A.Y 2013-14. Further, it was noticed by him that the assessee had claimed carry forward of the deficit of Rs. 2,05,54,360/- for the earlier years to be adjusted against the surplus of the subsequent years. The aforesaid claim of the assessee did not find favour with the A.O. The A.O was of the view that the expenditure incurred in the earlier years could not be met out of the income of the subsequent year and, the utilisation of such income for meeting the expenditure of earlier years would not amount to application of income for charitable or religious purposes. The A.O supported his aforesaid conviction on three grounds viz. (i) that the corpus donations received by the....
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....vered by the judgment of the Hon‟ble High Court of Bombay in the case of CIT Vs. Institute of Banking (2003) 264 ITR 110 (Bom), thus respectfully followed the same and directed the A.O to allow the carry forward of deficit in the succeeding year, after due verification of facts. 5. The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Departmental Representative (for short "D.R‟) relied on the order of the A.O. It was submitted by the ld. A.R that as the utilisation of the corpus donations/funds could not be construed as the "Income derived from property" held under trust wholly for charitable or religious purposes, hence the application of the same could not be brought w....
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....on‟ble High Court had clearly held that the income derived from the trust property was to be computed on commercial principles, and adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years was to be adjusted against the income earned by the trust in the subsequent year. The ld. A.R drawing our attention to the aforesaid judgment submitted that it was explicitly held that the adjustment of the deficit of the earlier years was to be excluded from the income of the trust for the subsequent year under Sec. 11(1)(a) of the Act. The ld. A.R further submitted that the issue under consideration was no more resintegra in light of the recent judgment of the Hon‟ble Supreme Court in the case o....
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....of Banking (2003) 264 ITR 110 (Bom). We find, that the Hon‟ble High Court while dismissing the appeal of the revenue had observed, that as the income of the trust was to be computed on commercial principles, thus 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, was to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year. We find that the Hon‟ble High Court had in unequivocal terms observed, that the adjustment of the expenses incurred by the trust in the earlier years, against the surplus of the subsequent year, will have to be excluded from the income of....