M/S SRI AUROBINDO COMPLEX TRUST,BANGALORE vs. THE INCOME TAX OFFICER (EXEMPTION) WARD-3, BANGALORE

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ITA 1672/BANG/2017Status: DisposedITAT Bangalore24 November 2017AY 2012-132 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the accumulation permitted under Section 11(1)(a) is to be computed on gross receipts, not net receipts. This decision was based on a precedent set by the Hon'ble Apex Court.

What were the facts?

The assessee, M/s. Sri Aurobindo Complex Trust, appealed an order concerning the calculation of accumulation permitted under Section 11(1)(a) of the Income Tax Act. The core dispute was whether this accumulation should be calculated on net receipts or gross receipts.

What were the issues?

The key legal issue was the basis for calculating the 15% accumulation allowed under Section 11(1)(a) of the Income Tax Act – whether it should be on gross or net receipts.

Which sections of the Income-tax Act were involved?

Section 11(1)(a)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, BANGALORE BENCH ‘SMC-B’, BANGALORE

Before: SHRI A.K.GARODIA, ACCOUNANT MEMBER

For Appellant: Shri Lokesh Jain, C. A
For Respondent: Shri Palani Kumar, Addl. CIT

O R D E R PER A. K. GARODIA, A.M.:

This appeal is filed by the assessee which is directed against the order of CIT (A) – 14, Bangalore dated 31.05.2017 for A. Y. 2012 – 13.

2.

The assessee has raised as many as 6 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.

3.

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, copy available on pages 117 to 119 of the paper book and in particular, my attention was drawn to page 119 of the paper book. Learned DR of the revenue supported the orders of the authorities below.

4.

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.

5.

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

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