TaxTMI 
TaxTMI 
2022 (4) TMI 319
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....ders passed by the Assessing Officer and Ld. Commissioner of Income Tax (Appeal) vide orders dated 26.12.2017 and 28.09.2018 respectively are illegal, uncalled for and against the law & facts. 2. Ld. Commissioner of Income Tax (Appeal) has sustained the additions merely on conjectures and surmises without any legal basis. 3. The Ld. Commissioner of Income Tax (Appeal) has wrongly sustained the additions on the ground that Assessee has failed to explain the amount of investment made out of set apart funds in the income tax return as well as in the audit report and in Form 10. However, the details have already been filed in the audit report and Form 10 available with the Assessing Officer that investment has already....
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....15 in form 10B as well as in the Return of Income and that the assessee has not given details to satisfy the required condition that the accumulated funds of the year under appeal itself were invested in modes specified u/s. 11(5) of the Act. 4. The Ld. Counsel for the assessee submitted that CIT(A) has admitted in the impugned order that assessee has filed Form 10 during the course of assessment proceedings (Page 9). He contended that since there is no provision to file revised return after 809 days or during assessment proceedings and so the assessee could declare amount of investment in Income Tax Return as well as Audit Report. Under the circumstances, the assessee only could File Form 10 during assessment proceedings and duly filed ....
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....ty. Sir, without prejudice to the above it is stated that it is well settled position that income derived from trust property has to be determined on commercial principles and if commercial principles for determining the income are applied, it is but natural that the adjustment of the expenses incurred by the trust for charitable and religious purposes in the earlier year against 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 such adjustment has been made having regard to the benevolent provisions contained in s. 11 of the Act and will have to be excluded from the income of the trust under s. 11(1)....
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....has filed Form 10 during the course of assessment proceedings [Page 9, CIT(A) order]. It is seen that the amount of accumulated funds for the year under appeal itself were invested in the modes specified u/s. 11(5) of the Act as evident from the Balance Sheet which were on record with both Ld. AO and Hon'ble CIT(A) and further CIT(A) itself stated that Rs. 1.70 cr has been invested in various banks on Page 9 of the impugned order. 7. It is well settled that income derived from trust property has to be determined on commercial principles where adjustment of the expenses incurred by the trust for charitable and religious purposes in the earlier year against income earned by the trust in the subsequent year may be regarded as applicatio....