M/S R K EDUCATIONAL TRUST ,BANGALORE vs. INCOME TAX OFFICER (EXEMPTION) WARD-2 , BANGALORE

The assessee has raised as many as 4 grounds but the effective grievance is only one and that is this that whether the accumulation to the extent of 15% permitted u/s 11 (1) (a) is to be calculated on net receipts or gross receipts.

Learned AR of the assessee submitted that the issue is squarely covered in favour of the assessee by the judgment of Hon’ble apex court rendered in the case of CIT vs. Programme for Community Organisation as reported in 248 ITR 1 and in particular, my attention was drawn to Para 3 of this judgment. Learned DR of the revenue supported the orders of the authorities below.

I have considered the rival submissions. In the case cited by the learned AR of the assessee, it was held that the accumulation has to be computed at the prescribed percentage of gross receipt and not net receipt. Respectfully following this judgment, this issue is decided in favour of the assessee.

In the result, the appeal of the assessee is allowed.