M/S SHRI PHOOL SINGH JANUTHAN SHIKSHA SAMMITTEE,BAREILLY vs. ASSESSMENT UNIT, THROUGH EXEMPTION WARD, BAREILLY

ITA 521/LKW/2025Status: DisposedITAT Lucknow27 May 2026AY 2022-236 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the repayment of the loan was eligible to be treated as an application of income under the first proviso to Explanation 4 of Section 11(1) of the Income Tax Act, as it was repaid from the current year's income and no prior claim for application of income was made for the capital expenditure funded by the loan.

What were the facts?

The assessee, an educational institution, repaid a loan of ₹71,00,000/- under a one-time settlement scheme. The loan was originally taken for capital expenditure on its educational institution in FY 2011-12 and 2012-13, but no application of income under Section 11 was claimed for this expenditure at that time.

What were the issues?

Whether the repayment of a loan, originally taken for capital expenditure on which no prior application of income was claimed, can be treated as application of income under Section 11 of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 11

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW ‘B’ BENCH, LUCKNOW

Hearing: 08.04.2026Pronounced: 27.05.2026

PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC under section 250 of the Income Tax Act, 1961 dated 27.06.2015, wherein the ld. CIT(A) has dismissed the appeals of the assessee against the orders of the ld. AO passed under section 143(3) r.w.s. 144C for the A.Y. 2022-23 on 7.03.2024. The grounds of appeal are as under:- “1. That on the facts and in low, the learned Commissioner of Income Tax (Appeals) erred in upholding the disallowance of ₹ 71,00,000/-brands loan repayment as application of income under Section 11 of the Income Tax Act, 1961, igno

The order continues below.

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