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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI V.DURGA RAO & SHRI G.MANJUNATHA
PER G.MANJUNATHA, AM: These two appeals filed by Revenue are directed against
common order of learned CIT(A)-17, Chennai dated
01.02.2018 and pertain to assessment years 2010-11 and
2012-13. Since, facts are identical and issues are common, for
the sake of convenience, these appeals were heard together
and disposed off by this consolidated order.
The Revenue has more or less filed common grounds of
appeal for both assessment years, therefore, for the sake of
2 ITA Nos. 1589 & 1590/Chny/2018
brevity, grounds of appeal filed in ITA No.1589/Chny/2018 for
assessment year 2010-11 are reproduced as under:-
“1. The order of the learned CIT(A) is contrary to the law and facts of the case. 2.1 The Id. CIT (A) erred in holding that the assessee is eligible to set off of brought forward excess application of funds to subsequent years. 2.2 The Id. CIT (A) erred in holding that the assessee is eligible to carry forward the same and set off against the shortfall in the subsequent years. 2.3 The Id. CIT (A) failed to observe that there is no provision in the Income Tax Act in respect of trusts which allows for determination of loss u/s. 11 and carry forward the same to subsequent year to be set oft against income of the subsequent year. 2.4 The Id. CIT (A) failed to observe that the setting off a against the spirit of the provisions of Section 11 and Section 12 and the intention of the Legislature. 2.5 The CIT(A) failed to consider the decisions in the cases of Ramjid Ras vs.C1T (1965) 58 ITR 181 AII) and Pushpawawati Singhania Research Institute of Liver Renal & Digestive Diseases vs. Dy.DIT (2009)29 SOPT 316( Del) 2.6 The ld.CIT(A) failed to observe that the if there was excess expenditure it was deliberate and could not be carried forward being related to earlier year’s income. 2.7 The ld.CIT(A) failed to observe that the excess application of funds in earlier year amounted to double benefit one being exempt income and the other being carry forward of loss. 2.8 The Ld ClT(A) has failed to note that the decision of the Honble ITAT ‘A’ bench in the case of Anjunian-E-Himayath-lslam vs.ADIT(Exemption) Chennai for the A.Y. 2009-10 reported in (2015) 59 taxmann.Com 379(Chennai-Trib) was in favour of the department. 3. For these and other grounds that may be adduced at the time of hearing, it l prayed that the order of the learned
3 ITA Nos. 1589 & 1590/Chny/2018
ClT(Appeals) may be set aside and that of the Assessing Officer may be restored.”
Brief facts are that assessee is a trust registered
u/s.12AA of the Act filed its return of income for assessment
year 2010-11 on 29.09.2010 admitting Nil total income after
claiming exemption u/s. 11 of the Act. The case was taken up
for scrutiny and assessment has been completed u/s. 143(3)
of the Act on 25.03.2013 by making additions towards
disallowance of depreciation on fixed assets on the ground that
when assessee has claimed purchase / acquisition of capital
asset as application of income u/s.11 of the Act, then further
deduction of depreciation on said assets amounts to double
deduction and hence, same cannot be allowed as deduction.
To support his stand, the Assessing Officer has relied upon
the decision of Hon’ble Supreme Court in the case of
M/s.Escorts Ltd. Vs. UOI., 199 ITR 43 . Further, the Assessing
Officer has disallowed retirement fund, gratuity fund,
inventories written off, bad debts written off, employees medical
insurance & global basic life insurance on the ground that
above payments are non-funded liability, but there is no actual
4 ITA Nos. 1589 & 1590/Chny/2018
outflow of cash and hence, same cannot be considered as
application of income u/s.11 of the Act. Similarly, the
Assessing Officer has denied carry forward of excess
application of income for charitable purposes to be adjusted
against income of trust in subsequent years, on the ground that
there is no provision to carry forward excess application of
income to subsequent years.
The relevant findings of the Assessing Officer are as
under:-
“4. The assessee’s justification for the claim of depreciation was examined. As far as the assessments of charitable organizations are concerned there are two sets of provsions provided ii the I T Act, firstly, the assessee’s eligibility for exemption of its income u/s. 11 to 13 of the I T Act. If the assessee is found to be eligible for exemption of its income u/s. 11 of the I T Act, then the assessee’s income and its application alone have to be examined irrespective of the other provisions contained in other sections of the Act, especially the sections provided from 14 to 8OVVA of the Act (i.e. Chapter IV to VI B). If the conditions provided uls.11 to 13 or u/s.l0(23C) are not fulfilled, then the provisions of Chapter IV to VIB will get attracted and he income has to be computed according to the said provisions. Thus, while computing the income of the Trust and its application to the extent of 35% of such income, any deductions
ITA Nos. 1589 & 1590/Chny/2018
/allowances provided from sec. 14 to 80 VVA should not be considered. Further, as per section 11 of the I T Act, even the capital expenditure will also amount to application of the income of the Trust and accordingly, such capital expenditure will be treated as application in its entirety and therefore any further allowance by way of depreciation or otherwise will amount to extra deduction or double deduction which is not permitted in the I T Act. Provision of depreciation u/s.32 of the I T Act is a specially permitted allowance white computing the income under the head ‘Business or Profession’, because in such a situation the capital expenditure cannot be allowed as a deduction. Under the provisions of section 11 of the IT Act, only the actual expenditure is considered as application. No notional expenditure or allowances are permitted to be counted as application of income of the Trust.
The Hon’ble Supreme Court of India in the case of Escorts Ltd Vs Union of India (199 ITR 43) also held that the assessee should not be allowed to claim two deductions on the capital expenditure on scientific research, i e. both under section 10(2)(vi) and section 10(2)(xiv) under 1922 Act or under sections 32(1)(ii) and 35(2)(iv) of 1961 Act.
Even in the case of ClT vs. Rao Bahadur Calavala Cuanan Chetty Ctrarittes (135 ITR 485), the Honbe High Court of Madras cIearLY held that while computing the income of the trust u/s. 11 for the purposes of application of income, the word incomes has to be understood in normal parlance without looking into or invoking the provisions of sec. 14 of the IT Act. The Court also held that all the out goings are to be considered
ITA Nos. 1589 & 1590/Chny/2018
while determining he income of the trust u/s.11 of the Act. The relevant extract of the judgment is under:
The provision of section 14 uses two expressions (1) ‘total income and (2) income derived from property held under trust’ total income is an expression, defined in the Act in section 2(45) as meaning the total amount of income referred to in section 5, computed the manner laid down in the Act. However there is no definition of income The words income’ is an expression of elastic ambit and the courts have always qualified their description by saying that it is not exhaustive. In the absence of any definition of income’ one has to proceed on the basis of it as a concept, as understood in general parlance. Income would ordinarily exclude a receipt by way of capital. Mere gross receipt cannot also be taxed as income. It may be broadly stated that what is taxed is not also any gross receipt. The receipt must be revenue in nature and is to be taxed after excluding necessary outgoings.
Section 11 contemplates an application of the income from charitable purposes. The charity can accumulate 25 per cent of the income. The application as well as the accumulation has necessarily (a be the income as accounted for in the accounts, and not as computed under the Act, subject of course to what Ls provided in sub-section (4) of section 11.
Taking into account the purpose for which the conditions of section 11(1)(a) am imposed, it would be clear Mat one has to consider the income as arrived at in the context of what is available in the hands of the assessee. subject of course to
ITA Nos. 1589 & 1590/Chny/2018
any adjustment for expenses extraneous to the trust. If the expression ‘income is so understood, then one has to take the accounts of the assessee with reference to the receipts and deduct therefrom the expenses necessary for earning or looking after that income. The net amount that remains would be available for distribution or application for charitable purpose. In applying the income for charitable purpose, even capital expenditure may be incurred Therefore, the nature of the expenditure in the hands of the entity which receives the money is not the criterion. So long as the assessee diburses the amount for capital or revenue purposes, whether the amounts am utilised for capital Or revenue purposes by the charity concerned, the assessee would have complied with that pan of the requirement of sect ion II, namely, application of the income for charitable purposes. The authorities will have to find out as to whether they are really charitable purposes or not. Subject to such examination, the application of income for charitable purposes will have to be excluded and it is only the balance that would require examination for finding out whether the assessee has compiled with the rule of accumulation to the extent of Rs. 10, 000 or 25 per cent of the income, whichever is higher.
The Tribunal has in a way mixed up the notion of total income in understanding the expression income from property held under trust”. Section 14 occurs in the chapter computation of total income’. It provides that all income for the purposes of charge of income-tax, and computation of total income be classified under certain heads. Therefore, the computation under the different categories or heads arises only of the purposes of ascertaining the total income for the
ITA Nos. 1589 & 1590/Chny/2018
purposes of charge. Those provisions cannot be introduced to find out what the income derived from the property held under trust to be excluded from the total income is. for the purpose of the exemptions under chapter lII.
The income from the properties held under trust would have to be arrived at iii the normal commercial manner without reference to the provisions which am attracted by section 14. Twenty-five per cent thereof will have to be ascertained and if the assessee had accumulated more than twenty-five percent, then the consequences contemplated by section 11 will follow: Thus, from the above, it is clear that the provisions of sec. 11 are categorically and clearly different from those of sec. 14 of the Act. The deductions or allowances that are provided in chapter IV (i.e. sec.14 to sec 59) are not relevant / applicable while determining the income for the purpose of sec. 11 of the Act. The Court also held that only the actual out goings while earning the income of the Trust are to be taken into account while determining the income of the Trust u/s. 11 of the Act. Therefore, items like depreciation which are not the actual out goings but a notional expenditure provided u/s.32 of the Act (Chapter IV) cannot form part of the allowable expenditure while computing the income of the Trust for the purposes of sec. 11 of the Act. In view of the above decision of the Madras High Court and also the Supreme Court of India. when he expenditure is alIowed in it entirety as deduction any further allowance under any other section will amount to double deduction and accordingly not permitted.
ITA Nos. 1589 & 1590/Chny/2018
in any case, in the present situation provision of depreciation is outside the purview of section11 of the I T Act. The assessee, being a charitable organization, may prepare its income and expenditure account to determine the excess of income over expenditure, in which the assessee is entitled to debit the depreciation as per the provisions of chapter IV of the Act (i.e. sec.14 to sec.80VVA of the Act). In such income and expenditure account also the assessee is not permitted to debit the capital expenditure. Hence the claim of depreciation is disallowed.
The AR’s justification for claiming Retirement Fund (Rs. 1240418/-) and Gratuity Fund (867296/-) as application of Income was considered. However, the same is not acceptable as these are only non-funded liability and no payment to any fund was actually made. There is no actual cash out flow therefore this claim of Retirement Fund and Gratuity Fund as application of income is not allowed.
The assessee had claimed Rs. 5,18,881/- as bad debt written off’. The AR’s justification in this regard was considered. However, the claim of bad debts written off by the assessee is not acceptable as there is no actual outflow of cash and it is merely a book adjustment. Moreover, it is only a notional expenditure and therefore cannot be construed as application of income. Hence, the claim of Rs. 518881/- as bad debts written off’ is disallowed. The assessee’s claim of Rs.118264/- as inventories written off is also disallowed on the similar grounds that there is no cash out flow and therefore cannot be claimed as application of income.
10 ITA Nos. 1589 & 1590/Chny/2018
The claim of Rs.1,52,402/- as ‘Employees Medical Self Insurance’ is also not acceptable as application of income as this is only a provision to that fund and no actual expenditure was incurred. Since there is no actual payment, the same cannot be claimed as application of income arid therefore the claim of Rs.1,52,402/- as Employees Medical Self insurance” is disallowed.
The assessee had claimed Rs. 30,224/- as GIobal Basic Life Insurance’. This claim is also not allowable as it is only a provision to that fund and no actual payment is involved. Therefore, the same cannot be claimed as application. Hence, the claim of Rs. 30,224/- as GIobal Basic Life Insurance” is disallowed.”
Being aggrieved by assessment order, assessee
preferred an appeal before learned CIT(A). Before, learned
CIT(A), assessee has challenged additions made by
Assessing Officer towards disallowance of depreciation and
denial of carry forward of excess application of income to
subsequent years in light of certain judicial precedents,
including decision of Hon’ble Jurisdictional High Court in the
case Medical Trust of the Seventh Day Adventists Vs. DIT, in
T.C.A No.949 of 2015 and 771 of 2016. The assessee has
also challenged additions made by Assessing Officer towards
11 ITA Nos. 1589 & 1590/Chny/2018
disallowance of contribution of employees retirement fund,
gratuity fund, provision for bad debts. The learned CIT(A) after
considering relevant submissions of assessee and also
following decision of Hon’ble Jurisdictional High Court in the
case of Medical Trust of the Seventh Day Adventists Vs. DIT,
(supra) has allowed depreciation claimed on fixed assets. The
learned CIT(A) has further allowed carry forward of excess
application of income for charitable purposes to subsequent
year and to set off against income of subsequent years.
However, he has confirmed additions towards contribution to
retirement fund, gratuity fund and provision for bad debts on
the ground that assessee has failed to file evidences to prove
that findings recorded by Assessing Officer that there is no
outflow of cash to consider the above expenditure as
application of income. Aggrieved by the learned CIT(A) order,
Revenue is in appeal before us.
The learned DR for the Revenue fairly accepted that issue
is covered in favour of the assessee by the decision of Hon’ble
Jurisdictional High Court, in the case of Medical Trust of the
12 ITA Nos. 1589 & 1590/Chny/2018
Seventh Day Adventists Vs. DIT, (supra). However, he strongly
supported the order of Assessing Officer in light of decision of
ITAT, Chennai Bench in the case of Anjuman-E-Himayth-E-
Islam vs. ADIT(Exemption) (2015) 154 ITD 755.
The learned AR for the assesse, on the other hand,
submitted that issue of depreciation on fixed assets and carry
forward of excess application of income is squarely covered in
favour of assessee by the decision of Hon’ble Jurisdictional
High Court in the case of Medical Trust of the Seventh Day
Adventists Vs. DIT, (2017) 84 Taxmann.com 202, where it has
been held that even though assessee has claimed purchase of
fixed assets as application of income, assessee can claim
depreciation on fixed assets. The Hon’ble High Court further
held that excess application of income for charitable purposes
can be carry forward to subsequent years and can be adjusted
against income derived from property held under the Trust.
We have heard both parties, perused materials available
on record and gone through orders of the authorities below. We
find that learned CIT(A) has allowed depreciation claimed on
fixed assets and carry forward of excess application of income
13 ITA Nos. 1589 & 1590/Chny/2018
for charitable purposes to subsequent years by following
decision of Hon’ble Jurisdictional High Court in the case of
Medical Trust of the Seventh Day Adventists Vs. DIT (supra).
The relevant findings of learned CIT(A) are as under:-
“4. Decision: I have considered the observations of the Assessing Officer and the submissions made by the appellant. The first issue is with regard to disallowance of depreciation on assets claimed as application of income by the appellant. It is the view of the Assessing Officer that the expenditure in connection with Fixed Assets was allowed in its entirety at the time of acquisition of these assets and further allowance under any other section of the Income Tax Act will amount to double deduction and therefore not permissible. The Assessing Officer also observed that depreciation allowance is a notional expenditure that cannot be treated as part of application of income for the purposes of section 11 of the Income Tax Act. During the appellate proceedings, the AR furnished written submissions and put forth his arguments to leverage the contention that the AO was not justified in following the depreciation claim.
The grounds of appeal and the submissions of the appellant have been duly considered. To resolve the issue on hand it is relevant here to refer to the decision of the jurisdictional High Court in TCA No.949 of 2015 and 771 of 2016 dated 08.08.2017 in the case of Medical Trust of the Seventh Day Adventists Vs. DIT, Exemption-Ill, Chennai. The Hon’ble High Court of Madras with regard to depreciation allowable in the case of a charitable trust held as follows:
Depreciation, as defined in Spicer and Pegler’s Book- Keeping and Accounts is the measure of the exhaustion of the effective life of a fixed asset owing to use or obsolescence during a given period. It may be regarded as that part of the cost of the asset which will not be recoverable when the asset is finally put out of use. The object of providing for depreciation is
ITA Nos. 1589 & 1590/Chny/2018
to spread the expenditure incurred in acquiring the asset over its effective lifetime, and the amount of provision made in respect of an accounting period is extended to represent the proportion of such expenditure which has expired during that period.
21 . The necessity of providing for depreciation emanates from the fact that once an asset ceases to be effective, it will have to be replaced. Providing for depreciation would ensure setting aside out of the revenue of an accounting period, the estimated amount by which the capital investment has expired during that period. This provision, incurred for the use of that asset for the purpose of earned profit should be charged against those profits as and when earned. Spicer. and Pegler at page 45, states as follows:-
If depreciation is not provided for, the books will not contain a true record of revenue or capital. If the asset were hired instead of purchased, the hiring fee would be charged against the profits; having been purchased, the asset is in effect, then hired by capital to revenue, and the true profit cannot be ascertained until an analogous charge for the use of the asset has been made. Moreover, unless provision is made for depreciation, the Balance Sheet will not present a true and fair view of the state of affairs since the assets will be shown at an amount which is in excess of the true amount of the unexpired expenditure incurred on their acquisition.
The claim of depreciation is thus part of standard accounting practice which is required for fair presentation of a company’s l1nancials. The computation of income in the case of an entity to which section ii is plicable would be in two stages. Firstly, the determination of the profit arrived at, which would be the total receipts net of expenditure and depreciation incurred in earning the receipts, and secondly the stage of application to Charitable /Religious objects. The two stages are distinct and are required to be complied with consecutively in order to determine the correct income and its application.
ITA Nos. 1589 & 1590/Chny/2018
The question before the Supreme Court in the matter of Escorts related to dual claims under section 35 of the Act in relation to the same asset the first weighted deduction and the second, depreciation. Thus, two benefits were extended in respect of the very same asset- We are faced with an entirely different and distinct position in the present batch of appeals one that involves a claim for exemption in respect of income earned from property held for charitable or religious purposes- We see no double benefit that is extended to the assessee in this regard.
Truth to tell, this Court in the matter of Calavala Cunnan Charities, has decided the question now under consideration in favour of the assessee and we could well have decided this Patch of appeals simply on the strength of the aforesaid decision. We are however persuaded to proceed further, with the discussion since a conflicting view has been expressed by the Kerala High Court in the case of Lissie Medical Institutions (supra) Though the attention of the Division Bench of the Kerala High court was drawn to the decision in Rao Bahadur Calavala Cunnan Chetty Charities (supra) and several decisions along similar lines the court was persuaded to take a contrary view preferring to follow the rationale of the judgment of the Supreme Court in the case of Escorts (supra).
As noted by us earlier, the judgment of the Supreme Court in escorts ‘urns on an entirely different position of aw and would not impact the issue being discussed in the present case.
We are supported in our view by a plethora of decisions of various High Courts the Bombay High Court in the case of CIT v. Munisuvrat Jain (1994 Tax Law Reporter 1084) and CIT Vs. Framjee Cawasjee Institute (109 CTR 463); Karnataka High Court in CIT Vs Society of the Sisters & St-Anne (146 JTR 28); Madhya Pradesh High Court in CIT Vs Raipur Pallottine Society (180 JTR 579); Gujarat High Court in CIT Vs. Sheth Manilal rachhnoddasVishram Bhavan Trust 198 ITR 598; Punjab and Haryana High court in CIT Vs. Market Committee Pipli (330 ITR 16) and CIT Vs. Tiny Tots Education society (330 ITR 21); Madhyapradesh High Court in CIT Vs. Devi Sakuntala
ITA Nos. 1589 & 1590/Chny/2018
Tharal Charitable Foundation (358 ITR 452) and the Calcutta High Court in CIT Vs. Siliuguri Regulated Market Committee (358 ITR 51). In addition the Delhi High Court in DIT Vs. Vishwa Jagriti Mission 262 CTR 558 and the Karnataka High Court in DIT (Exem) Vs Al Ameen Charitable Fund Trust (2016) 67 taxmann.com 160 have accepted the claim of the assessee distinguishing both the judgement of the Supreme Court in Escorts as well as that of the Kerala High Court.
In view of the discussion above, the question of law answered in favour of the assessee and against the revenue
Further as regards insertion of sub-section (6) to Sec.11 of the Act w.e.f. 01.04.2015 the jurisdictional High Court has observed as follows: 35. Para 7.6 of the Circular states that the amendment would apply to assessment year 2015-16 and subsequent assessment years. Reliance was placed on the judgment of the Supreme Court in CIT Vs. Alom Extrusions Ltd. (2009) and CIT vs. Vatika Township (367 ITR 466) for the proposition that an amendment that increases the liability of an assessee is liable to be applied only prospectively. Mr. Narayanaswamy would object stating that the amendment had been inserted to correct an existing anomaly and thus was clearly clarificatory, and consequently retrospective in operation.
We do not agree with the Revenue. The amendment, inserted specifically with effect from Assessment Year 2015- 2015 seeks to disturb a vested right that has accrued to the assessee. The amendment does not purport to be clarificatory, on the other hand, the Explanatory Memorandum makes it applicable only w.e.f. A.Y. 2015-16 and application of the amendment retrospectively would certainly lead to a great deal of hardship to the assessee. We are thus of the view that the provisions of section 11(6) of the Act inserted with effect from 1.4.2015 shall operate prospectively with respect to assessment year 2015-16 only.
ITA Nos. 1589 & 1590/Chny/2018
Respectfully abiding by the decision of the Jurisdictional High Court on the said issue in the case of Medical Trust of the Seventh Day Adventists vs. DIT, Exemption-Ill, Chennai, I hold that the appellant is entitled to claim depreciation. The appellant succeeds on this ground. 4.1. The second issue is with regard to denial of carry forward of excess application of earlier years by the Assessing Officer. It is relevant here to refer to the decision of the High Court of Madras in the case of CIT vs Matriseva Trust (242 ITR 20) (Mad) wherein the jurisdictional High Court observed as follows:
With regard to the second question, the Tribunal has held that the trust is entitled to set off the amount of excess application of the last year against the deficiency of Rs. 82,516 of the present assessment year.
When similar questions came up before the Rajasthan High Court and the Gujarat High Court in the cases of CIT v. Maharana of Mewar Charitable Foundation (1987)164 ITR 439 and CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal (1995 211 ITR 239), respectively, both the Rajasthan High Court and the Gujarat High Court have -answered the questions in favour of the assessee and against the revenue.
Following the aforesaid decisions of the Rajasthan and Gujarat High Courts. We answer the second question referred to us in favour of the assessee and against the revenue.
This view was further reinforced in the case of DIT vs Medical Trust of the Seventh day Adventist (supra) wherein the rationale of the decision in Matriseva Trust (supra) was approved. The Honble High Court of Rajasthan in the case of CIT Vs. Maharana of Mewar Charitable Foundation (supra) observed that there is nothing in the language of Section 11(1)(a) to indicate that the expenditure incurred in the earlier year cannot be met out of the income of the subsequent year and utilisation of such income for meeting the expenditure of the earlier year would not amount to such income being applied for charitable purposes, Further elaborating on this, the Hon’ble High Court of
18 ITA Nos. 1589 & 1590/Chny/2018
Madhya Pradesh in the case of CIT Vs. Gujrati Samaj (213 Taxman 182) (MP) declared that where expenses for charitable and religious purposes incurred in earlier year are adjusted against income of subsequent year, then the income of the subsequent year can be said to have been applied for charitable and religious purposes.
In view of the above I have no hesitation in holding that the Assessing Officer erred in denying the benefit of sec. 11 & 12 for the adjustment of excess application made in the earlier assessment years. The appellant succeeds on this ground.”
We further noted that above findings of learned CIT(A) is
further supported by decision of Hon’ble Supreme Court in the
case of CIT Vs. Subros Educational Society (2018) 96 Taxman
652 (SC), where Hon’ble Supreme Court held that any excess
expenditure incurred by trust / charitable institution in earlier
assessment year could be allowed to be set off against income
of subsequent years by invoking section 11 of the Act. We
further noted that Hon’ble Bombay High Court in the case of
CIT Vs. Institute of Banking Personnel Selection (2003) 131
Tamann.com 386 had considered an identical issue and held
that excess application of income for charitable purposes can
be carried forward to subsequent year and trust is entitled to set
off amount of excess application of the last year against income
derived from property held under the trust. The above finding
19 ITA Nos. 1589 & 1590/Chny/2018
recorded by learned CIT(A) is uncontroverted by Revenue.
Although, learned DR hassupported the order of Assessing
Officer and in light of decision of ITAT., Chennai Bench in the
case of Anjuman-E-Himayth-E-Islam vs. ADIT(Exemption)
(supra), we find that Hon’ble Jurisdictional High Court has
considered the above issue and by following number of
decisions of other High Courts has held that depreciation on
fixed assets is allowable, even though trust claimed amount
incurred for purchase / acquisition of capital asset as
application of income. Similarly, Hon’ble High Court has further held that excess application of income of charitable trust can be
carried forward and trust is entitled for set off of excess
application of income in the earlier year against income of the
trust in subsequent years. Therefore, we are of the considered
view that there is no error in the findings recorded by learned
CIT(A) and hence, we are inclined to uphold findings of learned
CIT(A) and reject ground taken by Revenue.
In the result, appeal filed by Revenue for assessment
year 2010-11 is dismissed.
ITA No.1590/Chen/2018 (A.Y:2012-13):
20 ITA Nos. 1589 & 1590/Chny/2018
The facts and issues involved in ITA No. 1590/Chny/2019
are identical to the facts and issues which we have already
considered in ITA No.1589/Chny/2018 for the assessment
year 2010-11. The reasons given by us in the preceding
paragraphs of ITA No.1589/Chny/2018 shall mutatis mutandis
apply to this appeal as well. Therefore, for similar reasons, we
dismiss appeal filed by Revenue for assessment year 2012-13.
In the result, appeals filed by Revenue for both
assessment years are dismissed.
Order pronounced in the open court on 3rd March, 2021
Sd/- Sd/- ( वी.दुगा� राव ) ( जी. मंजुनाथ ) (V.Durga Rao) (G.Manjunatha) !या�यक सद$य /Judicial Member लेखा सद$य / Accountant Member चे!नई/Chennai, 'दनांक/Dated 3rd March, 2021 DS आदेश क� ��त)ल*प अ+े*षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आयु,त (अपील)/CIT(A) 4. आयकर आयु,त/CIT 5. *वभागीय ��त�न1ध/DR 6. गाड� फाईल/GF.