TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 358
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....In law and in the facts and circumstances of Appellant's case, the Ld. CIT(A) has erred in by not directing the AO for rectifying the assessed income by reducing expenditure for Rs. 7,01,65,527 incurred during the year without appreciating the fact that though such expenditure was considered as utilization of accumulation made under Section 11(2) of the Act for A.Y. 2012-13 and 2013-14 but such accumulation was already denied in earlier year by treating income of the Trust as business income, hence it is entitled for deduction in current year. 3. In law and in the facts and circumstances of Appellant's case, the Ld. CIT(A) ought to have allowed deduction of Rs. 7,01,65,527 being revenue expenditure incurred during the year against income assessed as business income in Return of Income. 3. Further, one more appeal preferred by assessee for AY 2015-16 against order of the Ld. CIT(A) dated 15/02/2024 passed u/s 250 of the Income-tax Act, 1961 against assessment order passed u/s 143(3) dated 23.11.2017 for the Assessment Year 2015-16. The assessee has raised the following grounds of appeal in ITA No. 685/AHD/2024 for AY 2015-16: 1. In law and in the facts and ci....
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....e Assessing Officer has grossly erred in denying the exemption under Section 11 and under Section 12 of Rs. 7,66,16,175/- by invoking the provision of sub-section (8) of Section 13 of the Act where no such disallowance is called for. The Assessing Officer may be directed to delete the same. 6. In law and in the facts and circumstances of the case, the Ld. CIT(A) has erred in not adjudicating additional ground of appeal raised during the course of appellate proceedings whereby it was claimed that the amount of Rs. 7,66,16,175/- towards ISDS project under the head "Salary/Overheads recovered from Sponsored Projects & Services" recognized as income in Income and Expenditure account in current year is not liable to be taxed as income in the absence of actual realization of the same till date. The Ld. CIT(A) ought to have appreciated that only real income can be taxed. 4. The assessee has also taken following Additional grounds of appeal in ITA No.686/AHD/2024 for AY 2015-16: 1. In law and in the facts and circumstances of the appellant's case, Hon'ble Bench may kindly direct the Ld. AO to allow the expenses of Rs 7,01,65,527/- incurred during the year under conside....
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.... of the assessee has pointed out at PB page no. 11 where total amount of revenue expenditure incurred during the current assessment year is Rs. 15,36,29,244/-, which was arrived by reducing surplus for the year of Rs. 53,57,000/- from total amount of expenditure column which is Rs. 15,89,86,244/-. Thereafter, Ld. AR of the assessee drew our attention to the PB page no. 7 to show that out of current year revenue expenditure of Rs. 15,36,29,244/- amount of Rs. 7,01,65,527/- has been shown as applied against accumulation of AY 2012-13 and AY 2013-14. Therefore, the Ld. AR of the assessee has submitted that against income of the current year, the assessee has claimed only net expense and that the amount utilized from the accumulated funds had not been claimed while arriving at the correct income. Therefore, in nutshell, the argument of the assessee is to allow Rs. 7,01,65,527/- expense against current year income. 5.2 Alternatively, ld. AR of the assessee has also submitted that net income i.e. current year's accrued income as reduced by expenditure incurred during the current year should be assessed to tax. 5.3 The Ld. DR on the other hand, has not disputed the fact that the ....
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....e bench, we therefore direct Assessing Officer to verify whether Rs. 7,01,65,527/- has been shown as application out of income accumulated in AY 2012-13 and AY 2013-14 out of current year expenditure and if it is found correct then allow the same against current year income. To summarize the total amount of funds set aside under 'accumulation u/s 11' of the Act in the earlier years for which the assessee has opted for DTVSV and/or which has been subjected to tax should be allowed as deduction while arriving at the real income in the impugned assessment year. Even otherwise also the net income of the current year should be assessed to tax for the year under consideration by recomputing the net income as per Income and Expenditure account of the assessee, without considering application of income shown out of accumulation u/s. 11(2) of the Act, of earlier years. In either case, the assessed income shall not exceed the net income as per the income & expenditure account. 7. Now, coming to AY 2016-17 appeal against ITA No. 687/AHD/2024, the assessee has raised following grounds of appeal: 1. In law and in the facts and circumstances of the case, the Order passed by the Ld. C....
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....xemption under Section 11(1)(a) of Rs. 1,44,80,221/- and under Section 11(2) of Rs. 6,94,23,143/- and under Section 11(1B) of Rs. 7,66,16,175/- and an amount of Rs. 92,14,413/- as Amount deemed to have been applied to charitable or religious purposes by invoking the provision of sub-section (8) of Section 13 of the Act where no such disallowance is called for. The Assessing Officer may be directed to delete the same. 8. The assessee has also taken following additional grounds of appeal in ITA No.687/AHD/2024. 1. In law and in the facts and circumstances of the appellant's case, Hon'ble Bench may kindly direct the Ld. AO to allow the expenses of Rs 1,50,85,373/-/- incurred during the year under consideration which has been shown as utilization of Accumulation u/s 11(2) made in AY 2013-14 and thereby not claimed the same in the year under consideration, however since the Ld. AO has already disallowed the claim for accumulation u/s 11(2) amounting to Rs. 4,58,53,644 for AY 2013- 14, there would not be any requirement of showing utilization of accumulation of earlier year income against the current year expenses and hence such expenses should be allowed as deduction in curr....
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....s 7,66,16,175/- also, which has already been added by assessee in return of income as explained above. Therefore the Ld. AR explained the facts substantiating duplication of addition of Rs. 15.32 crores in the impugned assessment year. 11 Per contra, the Ld. DR relied upon the orders of the AO/CIT(A) and taken us through the orders of the authorities below. 12. Having heard both the parties extensively and also understanding the peculiar nature of the facts of the case, it is noted that the assessee had already offered amount of Rs. 7.66 crores while filing return of income. The said return was filed claiming that the activities of testing / calibration / sponsored fees received would qualify as charitable activity. It is also noted that in the foregoing paragraphs (para 6 to 6.3 supra) it is now an admitted position that net income arising from these activities can be taxed. Going further, it is also an admitted position that the computation of taxable income from the activities of testing/ calibration and sponsored fees has been made on actual basis. Therefore, as the amount of Rs 7.66 crores has already been taxed in the earlier year i.e. AY 2015-16, the said amount shall ....
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....mstances of the case, the Assessing Officer has erred in considering the activities undertaken by the Appellant, as in the nature of general public utility by charging cess or fee and not in the nature of preservation of environment and, therefore, it is hit by the mischief of First Proviso to Section 2(15) of the Act when no such proviso is attracted to the case of Appellant. The Assessing Officer may be directed to allow the exemption u/s 11 of the Act. 4. In law and in the facts and circumstances of the case, the Ld. Assessing Officer has erred in not appreciating the fact that the appellant is also carrying out the education activity by way of providing education to workers by imparting training. Therefore, appellant is specifically covered by Second Limb of Section 2(15) i.e. Education and hence, first proviso to Section 2(15) does not applicable in the case of the appellant. The Assessing Officer may be directed to consider the same. 5. In law and in the facts and circumstances of the case, the Assessing Officer has grossly erred in denying the exemption under Section 11(1B) of Rs. 10,15,818/- by invoking the provision of sub- section (8) of Section 13 of th....
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....d to the assessee, other grounds become academic and do not require to be adjudicated. 18. In AY 2018-19 - ITA No. 689/AHD/2024, the assessee has raised following grounds of appeal: 1. In law and in the facts and circumstances of the case, the Order passed by the Ld. CIT(A) is bad in law and deserves to be quashed. 1.1 In law and in the facts and circumstances of the case, the Ld. CIT(A) has erred in upholding observations of Ld. AO, that appellant is not carrying out any charitable activities. He has held that the appellant is squarely covered by the first proviso to section 2(15) of the Act and consequently denied exemption u/s 11 and 12 of the Act solely relying upon the finding of Ld. CIT(A) in appellant's own case for AY 2012-13 even though he was aware of the fact that such decision is set aside by Hon'ble Ahmedabad ITAT in ITA No. ITA No.1322/Ahd/2017 vide order dated 12.01.2018 and the matter is pending with Ld. CIT(A) only. The Ld. CIT(A) ought to have adjudicated the issue on merits of the case. 1.2 In law and in the facts and circumstances of the case, the Ld. CIT(A) has erred in upholding disallowance of deduction u/s 11 claimed in return o....
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.... ground raised, that Assessing Officer has allowed expense of only Rs. 6,31,49,697/- instead of actual expenditure of Rs. 8,69,46,455/- and therefore, requested before us to direct Assessing Officer to allow correct amount of expenditure of Rs. 8,69,46,455/-. To justify the current year actual expenditure of Rs. 8,69,46,455/-, the AR of the assessee has invited our attention to paper book page no. 6 which shows audited income and expenditure account for AY 2018- 19 where it was submitted that by reducing surplus of Rs. 44,18,935/- from total side of expenditure which is Rs. 9,13,65,390/-, net expenditure incurred and claimed for the year under consideration comes to Rs. 8,69,46,455/- and the same should be allowed. 21. Having gone through the documents before us, we found that as per income and expenditure account total expenditure of current year is Rs. 8,69,46,455/-. However, the Assessing Officer has allowed only Rs. 6,31,49,697/- and Ld. DR could not controvert the facts. On the contrary he relied on the orders of the lower authorities. Hence, we direct the Assessing Officer to allow the correct amount of expenditure incurred during the year under consideration while dealing....