TaxTMI 
TaxTMI 
2024 (9) TMI 274
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....e Income Tax Act, 1961 [hereinafter referred to as "the Act"] has been challenged on the following grounds: 1. "The Learned CIT(A) erred in not allowing deduction of 30% allowable as Standard Deduction amounting to Rs.76,50,731 claimed as deduction u/s 24(a) of the Income- tax Act, 1961 overlooking that there is no provision in the Income-tax Act, not to allow standard deduction u/s.24(a) if the income is computed in the case of a Charitable Trust granting exemption u/s 11 of the Act on the income utilized for objects of the Trust. 2. The Learned CIT(A) erred in overlooking that Income-tax is charged on the Trust as well on other Assessee under Income-tax Act on TOTAL INCOME derived under different heads under Section 14 of the Act and for TRUST if there is Taxable Income, the deduction is allowed under Section 11(a) if the income is applied for charitable purposes and therefore if there is no Taxable Income computed under Section 14 then no deduction is allowed under Section 11(a) of the Act, therefore the Section 11(a) is not a charging Section but the same is a beneficial Section and if Trust is having Taxable Income which is applied for the objects of the Trus....
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....ulation under Section 11(2) overlooking that when Form No. 10 was filed, the amount of Rs.2,99,25,330 was arrived at on the basis of income shown in Return of Income and when due to certain disallowances in Assessment Order under Section 143(3) the Taxable Income has been increased, the accumulation under Section 11(2) should also be allowed as per tax Taxable Income as per the Assessment Order and not the amount shown in Form No. 10 filed. 8. The Learned CIT(A) erred in not considering ground no 8 of the grounds of appeal wherein the Appellant claimed the Learned A.O. erred in charging interest of Rs.7,71,561 under Section 234C of the Income-tax Act. 9. The Appellant craves to add and or alter the above grounds of appeal." 3. The facts in brief are that the appellant is a charitable trust registered u/s. 12A of "the Act" and is allowed certificate u/s. 80G by the Commissioner of Income Tax. The appellant trust is earmarking and spending funds for maintenance of college at Andheri, Mumbai as well as facilities at the Maritime Engineering College at Induri, Pune. The Appellant Trust has invested funds in construction of buildings for colleges at Andheri, Mumbai ....
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....r assessees. It was contended that there was no error in computation of income arrived at by the assessee in respect of rental income after claiming standard deduction u/s 24(a) of "the Act". The assessee further contended that the Ld. AO has included sum of Rs. 13,373/- (A.Y. 2014-15) on account of interest on income tax refunds under Income from Other Sources for A.Y. 2008-09 as shown in the Computation of Income and thus the same interest allowed u/s. 244A of "the Act" and u/s. 143(1) of "the Act" accepting the return of income but the same allowance of the interest has been withdrawn in the subsequent order u/s. 143(3), therefore, the said interest taxed earlier cannot be taxed for the second time when the subsequent order was passed. 7. It is further contended before the Ld. CIT(A) that the Ld. AO has restricted the deduction u/s. 11(2) to Rs. 42,00,000/- only as accumulation overlooking that when form no. 10 was filed, the amount of Rs. 42,00,000/- was arrived at on the basis of income shown in Return of Income and when due to certain disallowance in assessment order u/s. 143(3) the taxable income has been increased, the accumulation u/s. 11(2) should also be allowed as pe....
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....Association [2001] 247 ITR 201 Dec 2000 held that it is mandatory for the person claiming the benefit of Section 11 to intimate to the assessing authority the particulars required, under rule 17A in the form 10 of the Rule. During the assessment proceedings, the Ld. AO does not have the necessary information, therefore, question of excluding such income from assessment does not arise at all. 11. It was therefore held that in the case of the assessee it is evident from the record of the case that the assessee did not furnish the required information till after the assessment for relevant years were completed, therefore, the exemption u/s 11(2) has to be disallowed. The finding of the Ld. AO was upheld and confirmed in that regard. The Ld. CIT(A) has dismissed the appeal filed by the assessee. Aggrieved by the Ld. CIT(A)'s order, the assessee is in appeal before us. 12. We have heard the Ld. AR for the appellant and DR for the revenue. At the very outset, the Ld. AR submitted that the appellant does not press ground no. 6 and 8 in the ITA No. 113/Mum/2024 (A.Y. 2014-15) and ITA No. 650/Mum/2024 (A.Y. 2015-16). 13. However, in respect of the ground no. 1 to 5 which relates to....
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....39;s case for earlier period. The co-ordinate bench of ITAT, Mumbai Bench "B" in assessee's own case for AY 2005-06 in ITA No.200/Mum/2011 had considered similar issue in the light of provisions of section 24(a) and also section 11 of the Income-tax Act, 1961, and held that income of a trust / institution shall be computed under normal commercial principles without resorting to computation mechanism as provided under respective head of income while determining income available for application u/s 11 of the Act. The relevant observations of the Tribunal are as under: "8. We have heard the rival parties and gone through the material available on record. On a perusal of the Tribunal order dated 30.09.2013 in ITA Nos. 6970 & 199/Mum/2011 & ITA No. IIII/Mum/2011 for assessment year 2004-05, we find that on identical issue has been decided against the assessee by observing as under: 3.2 The first issue arising in the instant appeals is the validity in law of the assessee's claim toward repairs and maintenance u/s. 24 of the Act in computing the income from house property let out assessee, and toward which it has (subsequently) a single precise ground. The claim is, by al....
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.... 638 & W93/Mum/2012 daleri 17.05.2013): '14 The income (and loss, which is only negative income) failing under chapter in of the Ad diu, uius, exempt from the levy of the tax, would not form part of the computation of the income under Chapter IV of the Act. That in fact is a fundamental premise; the basis of sec. HA of the Act. The Revenue's case in this regard is unexceptional, and we confirm the same. In both the decisions, the tribunal relied on the decision in the case of Harprasad & Co. (P.) Ltd. (supra). The reliance by the id. CIT(A) on the Circular issued by the Board (No. 5P(LXX6) dated 19.06.1968), explaining the position in the matter, is also apposite. It stands explained that only the income as reflected in the accounts of the trust/institution that is to be applied or deemed to have been applied for charitable purposes, and which, therefore, has to be computed in the commercial sense. The said Circular has been found by the hon'ble courts of law as representing the correct interpretation of the relevant provisions and the requirement of the law, as in the case of CIT vs. Programme for Community Organisation [1997] 228 ITR 620 (Ker), since approved....
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....1 (Mum) (SB) is, under the circumstances, misplaced. The said decision is, firstly, sansany reference to any precedents; nay. even without a discussion of the law in the matter. This aspect would in fact become clear in view of the questions referred to and answered by tribunal. As a reading of its order would show (refer para 1), are not directly connected with the issue before us. decision, thus, would be of no assistance to the assessee, w/jffifve having even otherwise decided the matter following the precedents in the matter, so that the decision in the case of Baroda v. H.C Shrivastava [2002] 256 TTR 385 (Bom), advocating judicial discipline with reference to the decision by the apex court in CCE v. Dunlop India Ltd. AIR 1985 SC 330, only supports the same. The decision in the case of Ameen Education Society V. DIT (Exemption) (in IT A No. 575/Bang./2011 dated 28/9/2012, also at [2012] 26 taxmann.com 250 (Bang.)) is again only in respect of the specific provision of sec. 11(1 A) of the Act, i.e., qua capital gain, and, thus, not applicable. We have already clarified that our decision is based on and represents the general position of law, so that it would be subject to the spe....
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....Rs.13,00,635, as per its financial statements. However, while arriving at income available for application u/s 11, it has claimed standard deduction @30% of gross rental income u/s 24(a) of Income-tax Act, 1961. The AO has disallowed standard deduction claimed u/s 24(a) of the Act. However, expenditure incurred as per the books of account of the assessee has not been allowed while determining income available for application. It is the settled position of law that once income of a trust / institution is computed under the provisions of section 11 of the Act, whatever income derived from the property held under trust is to be taken into account and against which actual expenditure incurred for the objects of the trust has to be considered as application of income. Therefore, while arriving at income u/s 11, the AO needs to allow deduction towards actual repairs and maintenance expenses incurred for Rs.13,00,635. Therefore, we direct the AO to allow deduction towards actual repairs and maintenance expenditure incurred for Rs.13,00,635 before arriving at income available for accumulation u/s 11(2) / taxable income of the trust / institution." 15. In view of the above findings, we d....
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....ed funds in the forms and modes specified u/s 11(5) of the Act. In this case, initially the assessee has accumulated a sum of Rs.210 lakhs and such accumulation has been allowed by the AO. The subsequent accumulation of the remaining income has been made after a gap of six years, that too, after exhausting all options open to the assessee to challenge disallowance of standard deduction made by the AO u/s 24(a) of the Income- tax Act, 1961. Although, there is no bar under the Act to file a revised form 10 for accumulation of income to subsequent period u/s 11(2), but such accumulation cannot be stretch to a period of six years, that too, to overcome taxable income computed by the AO by disallowing standard deduction claimed u/s 24(a) of the Act. The benefit of accumulation of income u/s 11(2) has been provided to trusts / institutions claiming exemption considering the fact that where it is not possible to utilise the amount of income within the financial year due to various reasons including non receipt of income for that year, although income is computed under mercantile principles and for paucity of time, after fulfilling certain conditions. Therefore, such benefit cannot be used....