TaxTMI 
TaxTMI 
2026 (5) TMI 820
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.... passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the "Act") and relates to Assessment Year (A.Y.) 2017-18. 2. The Grounds of Appeal raised by the Revenue are as under: "1. Whether on the facts and in circumstances of the case, Ld. CIT(A), NFAC is justified in deleting the disallowance of Rs. 3,32,91,973/- claimed as application of income during the year under consideration." 3. The solitary issue in the present appeal relates to the disallowance of Rs. 3,32,91,973/- being accumulated amount out of Rs. 5.60 Crs accumulated u/s 11(2) of the Act in A.Y 12-13, the impugned year before us being A.Y 17-18 on the ground that the claim of the application of the said amount by the assessee under Sectio....
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....said year, the assessee is entitled to claim the amounts so accumulated as exemption in the year of accumulation or set apart. The provision of Section 11(2) clearly provide that income so accumulated or set apart was not be included in the total income of the previous year of the person in receipt of the income provided he furnished a statement in the prescribed form to the Assessing Officer and the money so accumulated is invested or deposited is modes specified in sub-section (5). The provision of Section 11(2) are reproduced herein for clarity: (2) Where eighty-five per cent of the income referred to in clause (a) or clause (b) of sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to ....
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....ner laid down in Section 11(2)(b) of the Act. 8. The amount of Rs. 3,32,91,973/- which is the amount in dispute before us is reflected as credited to the consolidated income and expenditure account of the impugned year. The copy of the consolidated account was placed before us by Ld. Counsel for the assessee and the same is reproduced hereunder: 9. The assessee had explained the reason for crediting the same to the consolidated income and expenditure account as out of the accumulation of Rs. 5.60 crores. The assessee had stated to have acquired fixed assets during the year out of the accumulated amount, of Rs. 2.27 crores and the balance 3.32 crores was stated to be expended for revenue purposes in the impugned year. This explanation ....
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....3 itself and therefore, the claim of exemption of 3.32 crores again in the impugned year i.e. A.Y. 2017-18 has been rightly held by the AO as double exemption claimed by the assessee. (ii) The other reason is that as per the facts before us the assessee had not utilized Rs. 3.32 crores for application towards the objects of the assessee society / trust in the impugned year. 12. The consolidated income and expenditure account reproduced above shows the income earned by the assessee Board, excluding the amount transferred from the accumulated fund of A.Y. 2012-13, to be 34.52 crores. The total expenditure incurred by the assessee is 27.32 crores. In the Form 10B file for the impugned year placed before us at Paper Book Page No. 71....
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....o A.Y. 2017-18 i.e. up to the expiry of 5 years from the end of the assessment year in which the funds were so accumulated and as per the provisions of the Act 11(3), they are deemed to be the income for the year in which they are not utilized for the purposes for which it is accumulated. The provisions of Section 11(3) sub-Clause (iii) of the Act providing so are as under: (3) Any income referred to in sub-section (2) which- (a) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or (b) ceases to remain invested or deposited in any of the forms or modes specified in sub-section (5), or (c) is not utilised for th....
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....ication for A.Y. 2012-13 but his finding is contrary to the facts noted by us above that the assessee itself had reflected Rs. 5.60 Crs as accumulated u/s 11(2) of the Act in Form 10B for A.Y 12-13 and there is no evidence on record to show that the assessee had not claimed such exemption in A.Y. 2012-13. 16. In view of the above the order passed by Ld. CIT(A) allowing assessee's claim to exemption Rs. 3.32 crores is set-aside. The order of the Assessing Officer is confirmed. 17. In the result, the appeal of the Revenue is allowed. This Order pronounced in Open Court on 01/04/2026. ============= Document 1 State Examination Board Opp. Government Library, Sector - 21 Gandhinagar E-Mail : [email protected] Consolidated Income ....