TaxTMI 
TaxTMI 
2018 (8) TMI 2071
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....ing that income accumulated under section 11(2) in the FY 2010-11 amounting to Rs. 3,45,65,489 was applied during the year under consideration. 4. On facts and circumstances of the case and law available, the sum of Rs. 3,45,65,489/-, applied during the year has to be considered as relatable to income accumulated under section 11(2) in the FY 10-11 and as claimed in the return of income. 5. In the view of above and other grounds to be adduced at the time of hearing the appellant prays that the order passed by the learned CIT(A) 14, Bangalore be quashed; OR IN THE ALTERNATIVE (i) Application of income during the year amounting to Rs. 3,45,65,489 be considered as relatable to income accumulated under section 11(2) in the FY 2010-11 as claimed in the return of income. (ii) Income accumulated under section 11(2) during the year be considered at Rs. 5,99,82,888 as claimed in the return of income. The appellant prays accordingly." 2. The assessee is a trust. The object of the trust was to provide education to the public, relief to the poor, medical relief and other objects of general public utility. The assessee institutes prizes which a....
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....ount spent Rs. 1,89,01,520/- was considered as application of income of AY 2012-13 for charitable purpose. 85% of the total receipts in AY 2012-13 of Rs. 9,28,05,186 was Rs. 7,88,84,408/- being 85% of gross receipts of current year. If the sum of Rs. 1,89,01,520 spent for charitable purpose in AY 2012-13 is reduced from Rs. 7,88,84,408 the resultant figure of Rs. 5,99,82,888/- which would be the deficit in applying 85% of the total income of AY 2012-13 u/s.11(2) of the Act. 15% of the receipts of AY 2012-13 of Rs. 9,28,05,186 which can be accumulated as a matter of right would be a sum of Rs. 1,39,20,778. The following statement will explain the claim of the Assessee for accumulation u/s.11(2) and 11(1)(a) of the Act:- Particulars Amount (Rs) Amount (Rs) Bank Interest 9,26,53,299 Interest on Income. ax refund 151,887 Total Receipts 9,28,05,186 Less:- Income set apart for future under section 11(1)(a) - 15% of total receipts 1,39,20,778 Balance 7,88,84,408 Total expenditure incurred towards objects of the trust 5,34,67,009 Less:- Amount utilized out of income accumulated under....
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.... the income - (a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated to set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of [fifteen] per cent of the income from such property. 6. And further Section 11(2) permits accumulation where 85% of the income could not be or is deemed to be not to have been applied to charitable or religious purposes in India during the previous year. 7. Examination of the provisions of Section 11(1) make it clear that the income derived from property during the previous year is not equated with accumulated income u/s. 11(2). The provisions require that the income earned from the property held under trust must be first applied to the objects of the trust and if any income is remaining then accumulation to the extent of 15% of such income is permitted and if the total income could not be utilised towards the objects of the trust then the assessee can resort to further accumulation u/s. 11(2) over a....
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.... 27-Jul-09 27-Jul-10 1,00,00,000* 7.25 IDBI FD no. 1175 27-Jul-09 27 Jul-10 1,00,00,000* 7.25 IDBI FD no 1182 27-Jul-09 27 Jul-10 1,00,00,000* 7.25 IDBI FD no. 1243 27-Jul-09 27-Jul-10 1,00,00,000* 7.25 IDBI ED no. 1168 27-Jul-09 27-Jul-10 1,00,00,000* 7.25 IDBI FD no. 1229 27-Jul-09 27-Jul-10 1,00,00,000* 7.25 IDBI FD no. 1236 27-Jul-09 27-Jul-10 1,00,00,000* 7.25 IDBI FD no. 1212 27-Jul-09 27-Jul-10 1,00,00,000* 7.25 SBH FD No.1674 27-Jul-09 27-Jul-10 1,00,00,000* 7.25 SBH FD No.1812 27-Jul-09 28-Jul-10 1,00,00,000* 7.25 SBH FD No.1878 27-Jul-09 29-Jul-10 1,00,00,000* 7.25 SBH FD No.1947 27-Jul-09 30-Jul-10 1,00,00,000* 7.25 SBH FD No.2000 27-Jul-09 2-Aug-10 1,00,00,000* 7.25 SBH FD No.2077 27-Jul-09 3-Aug-10 1,00,00,000* 7.25 SB11 ED No 2146 27-Jul-09 4-Aug-10 1,00,00,000* 7.25 SBH ED No.2179 27-Jul-09 5-Aug-10 1,00,00,000* 7.25 SBH FD No.2248 27-Jul-09 6-Aug 10 1,00,00,000* 7.25 Canara bank FD 24-Sep-09 26-Sep-10 4,80,....
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....see, are as follows : . Rs. Interest on tax free securities (under s. 8) 6,000 Property income (under s. 9) 13,000 Loss in business (other than in speculative transaction) (under section 10 of the 1922 Act) 5,000 Total 14,000 An Income-tax Officer proposes to set off the loss of Rs. 5,000 against tax free income of Rs. 6,000 and to tax Rs. 13,000 out of the total income of Rs. 14,000. On the other hand, the assessee contends that the loss of Rs. 5,000 shall be set off against the chargeable income of Rs. 13,000 and only Rs. 8,000 out of the total income of Rs. 14,000 be taxed in his hands. There is nothing in s. 24(1) to indicate that a particular mode of set off shall be followed. In the absence of any such indication, the general rule to be followed in all fiscal enactments is that where words used are neutral in import, a construction most beneficial to the assessee should be adopted. The words he shall be entitled to have the amount of loss set off accruing in s. 24(1) would seem to be consistent with the conferment of a benefit on the assessee which he can claim as a right. Hence, in the above illustration, the assessee....
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....n made out of the accumulation of AY 2011-12 and only the remainder should be considered as application of income of AY 2012-13. The accumulation of unutilized income of AY 2011-12 u/s.11(2) of the Act as well as the income of AY 2012-13 are deployed in the form of fixed deposits in bank accounts. The fixed deposits as and when they mature are again renewed and reinvested in fixed deposits. Therefore, the identification of funds of the Assessee as identifiable to accumulation of unutilized income of AY 2011-12 or that of receipt as income of AY 2012-13 is not possible in the present case. In such circumstances, we are of the view that the plea of the Assessee ought to have been accepted by the CIT(A). The CIT(A) has opined that under the provisions of Section 11(1) income derived from property during the previous year is not equated with accumulated income u/s. 11(2). The provisions require that the income earned from the property held under trust must be first applied to the objects of the trust and if any income is remaining then accumulation to the extent of 15% of such income is permitted and if the total income could not be utilised towards the objects of the trust then the as....
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....b-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, shall not be treated as application of income for charitable or religious purposes, either during the period of accumulation or thereafter." 16. The total receipts or income of the assessee was Rs. 9,28,05,186. The unutilized accumulated deficit of AY 201-11 was Rs. 3,45,65,489. During the previous year relevant to AY 2012-13, the assessee applied a sum of Rs. 5,34,67,009 for charitable purpose. Out of the total income of Rs. 9,28,05,186 15% of the receipts which is eligible for accumulation in future u/s. 11(1)(a) of the Act which was a sum of Rs. 1,31,20,778 and 85% to be applied for charitable purpose would be Rs. 7,88,84,408. The assessee's claim that out of income applied for charitable purpose in AY 2012-13 of Rs. 5,34,67,009/-, (i) Rs. 3,45,65,489/- should be construed as having been spent out of income accumulated under section 11(2) in the financial year 2010-11 relevant to AY 2011-12; (ii) Balance amount spent Rs. 1,89,01,520/- should be construed as income applied from the current year's income. Since amount spent Rs. 3,45,65,489/- was relatab....