DCIT , CC - 7(1), MUMBAI vs. D.Y PATIL SPORTS ACADEMY, MUMBAI

The dispute in the present appeal is confined to the deletion of disallowance of carry forward of deficit amounting to ` 9,32,09,946.

Brief facts are, the assessee is a charitable trust and has been granted registration under section 12A of the Act. For the year under dispute, the assessee filed its return of income on 30th September 2014, declaring nil income after claiming exemption under section 11 of the Act. During the assessment proceedings, the Assessing Officer noticed that the assessee in the impugned assessment year has incurred excess expenditure of ` 9,32,09,946, which has been carried forward to be set–off against the income of the subsequent year. Noticing the above, the Assessing Officer called upon the assessee to justify its claim of carry forward. Not being satisfied with the explanation of the assessee, the Assessing Officer held that carry forward of excess expenditure / deficit / loss is allowed only in case of business or profit making entities. Thus, ultimately, he disallowed assessee’s claim of carry forward of excess expenditure/deficit amounting to ` 9,32,09,946. The assessee challenged the aforesaid disallowance before the first appellate authority.

The learned Commissioner (Appeals) having noticed that the Hon'ble Jurisdictional High Court in CIT v/s Institution of Banking Personal, [2003] 264 ITR 110 (Bom.) has allowed similar claim and in assessee’s own case in assessment year 2010–11 and 2011–12, the Tribunal has allowed assessee’s claim of carry forward of excess

When the appeal was called for hearing, no one was present on behalf of the assessee to represent the case despite service of notice. There is no application by the assessee seeking adjournment either. Therefore, we proceed to dispose off the appeal ex–parte qua the assessee after hearing the learned Departmental Representative and on the basis of material available on record.

We have heard the learned Departmental Representative and perused the material on record. Undisputedly, the Hon'ble Jurisdictional High Court in Institution of Banking Personnel (supra), has held that excess expenditure/deficit of the current year can be carried forward to the subsequent assessment year for setting off against the income of that year. In fact, the Revenue has also not disputed the aforesaid position of law declared by the Hon'ble Jurisdictional High Court which is evident from ground no.(iii) raised in the appeal memo. Pertinently, as observed by the learned Commissioner (Appeals), identical issue arising in assessee’s own case for the assessment year 2010–11 and 2011–12 has been decided by the Tribunal in favour of the assessee. The aforesaid factual position has not been controverted by the Revenue. In view of the aforesaid,

In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 05.02.2020