TaxTMI 
TaxTMI 
2020 (1) TMI 1727
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....ct, 1961 (in short the Act) dated 29/03/2015. 2. The grounds of appeal raised by the assessee reads as follows: 1. That the ld. CIT(A) was wrong in confirming the action of ld. A.O. by allowing exemption of @ 15% on the net receipt (Rs. 52,14,148/-) in place of gross receipt (Rs. 2,91,60,237/-) as per the provisions of section 11 of the Act. Hence confirming the imp A.O. is unjustified and needs to be deleted. 2. That the ld. CIT(A) was wrong in confirming the action of ld. A.O. by not allowing the depreciation to the assessee while calculating the application of funds. Therefore, the addition made by the ld. A.O. and confirmed by the ld. CIT(A) is unjustified and needs to be deleted. 3. That the assessee crave....
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....icate this issue first of all, let us go through the provisions of Section 11 of the Act which is reproduced below for ready reference: 11. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income- ^35[(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 or 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; (b....
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....med to be part of the income; (2) if, in the previous year, the income applied to charitable or religious purposes in India falls short of seventy- five per cent of the income derived during that year from property held under trust, or, as the case may be, held under trust in part, by any amount- (i) for the reason that the whole or any part of the income has not been received during that year, or (ii) for any other reason, then- (a) in the case referred to in sub- clause (i), so much of the income applied to such purposes in India during the previous year in which the income is received or during the previous year immediately following as does not exceed the said amount; and (b) in the case refe....
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....of sub- section (1),- (a) where a capital asset, being property held under trust wholly for charitable or religious purposes, is transferred and the whole or any part of the net consideration is utilised for acquiring another capital asset to be so held, then, the capital gain arising from the transfer shall be deemed to have been applied to charitable or religious purposes to the extent specified hereunder, namely- (i) where the whole of the net consideration is utilised in acquiring the new capital asset, the whole of such capital gain; (ii) where only a part of the net consideration is utilised for acquiring the new capital asset, so much of such capital gain as is equal to the amount, if any, by which the amou....
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....ub- clause (b) of clause (1) of section 55; (iii) " net consideration" means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.] We note that in the provisions of section 11(1) it has been clearly mentioned "...15% of the income", hence it is gross income of the assessee trust and not the net income. Therefore, based on this factual position as mentioned in Section 11(1) as noted above, we direct the Assessing Officer to allow 15% exemption on gross receipts. 6. In second ground the solitary issue is that the Assessing Officer did not allow the depreciation expenses to the asse....