2022 (4) TMI 224

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....arlier years against the income of the current year. The Assessing Officer while completing the assessment denied the claim of the assessee for set off of deficit of earlier year against the income of the current year, by placing reliance on the decisions of the Rajasthan High Court in the case of Akhey Ram Ishwari Prasad Trust Vs. CIT 130 Taxman 827 (Raj.) and the decision of the Mumbai Bench of the Tribunal in the case of ITO Vs. Lakshmi and Usha Mittal in ITA. No. 5383/Mum/2011. Assessee in the course of assessment proceedings relied upon the decision of the Hon'ble Delhi High Court in the case of DIT Vs. Raghuvanshi Charitable Trust (2011) 197 Taxman 170 (Del). 3. On appeal the ld. CIT (Appeals) following the decision of the jurisd....

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....or Community Organization (supra), the assessee is entitled to claim 15% of the income derived from property held under trust even if the expenditure is more than 85%, I see no reason why deficit of earlier years even if it includes 15% accumulation. 4.8 In the case of DIT vs. Raghuvanshi Charitable Trust (supra), the Hon'ble Delhi High court have held as under: 8. It would be fruitful to refer to the discussions contained in Institute of Banking Personnel Selection (IBPS)'s case (supra), Per Hon'ble Mr. Justice S.H. Kapadia, which is advanced before us by the learned counsel for the revenue to repel the same in the following words: "Now coming to question No. 3, the point which arises for consideration is : whether excess....

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....s in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment has been made having regard to the benevolent provisions contained in the section 11 of the Act and that such adjustment will have to be excluded from the income of the trust under section 11(1)(a) of the Act. Our view is also supported by the judgment of the Gujarat High Court in the case of CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal [1995] 211 ITR 293. Accordingly, we answer question No. 3 in the affirmative, i.e., in favour of the assessee and against the Department." 9. It is clear from the above that ....

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.... has not taken any cognizance of the said claim let alone the revised claim. It is also worthwhile to mention that the Assessing Officer has himself, in the assessment proceedings for assessment year 2013-14 under section 143(3) has allowed deficiency in application of income in previous year amounting to Rs. 1,65,04,995/- which is as per the revised claim. 4.10 In view of the discussion above and relying on the decision of the Hon'ble Delhi High Court in the case of DIT vs. Raghuvanshi Charitable Trust (supra), the Assessing Officer is directed to allow the set off of carried forward deficit. Even otherwise the appellant has filed a letter exercising option in terms of clause (2) of the Explanation to section 11(1) which the Assessin....