Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA
O R D E R Per Shamim Yahya, A. M.: This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals), Mumbai (‘CIT(A)’ for short) dated 09.03.2017, pertaining to the assessment year (A.Y.) 2012-13.
The grounds of appeal
read as under:
1. Whether on the facts of the case and in hue the ld.ClT(A) erred in allowing the carry forward of deficit of Rs.2,41,28,160/- and allowing set off against the income of the subsequent years.
2 (A.Y. 2012-13) ITO-(E) vs. Seth Walchand Hirachand Loka-Kalyan Trust 2. Whether, on the. fuels and in the circumstances of the case and in law, the Ld C1T(A) erred in allowing the claim of the assessee for carry forward of the said deficit, ignoring the fact that there was no express provision in the I. T. Act, 1961 permitting allowance of such claim.
Whether, on the. fuels and in the circumstances of the case and in law, the Ld C1T(A) erred in allowing the claim of the assessee for carry forward of the said deficit by relying upon the judgment of Hon'ble Bombay High Court in the case of Institute of Banking Personnel Selection, ignoring the fact that the Department has not accepted the said decision of the jurisdictional High Court on merit of the case, but due to smallness of tax effect appeal was not filed before Hon'ble Supreme Court. However, on this issue the department, has filed SLP before the Apex Court in other cases inclusive the case of MIDC(SPL (Civil) 9891 of 2074) in which leave has been granted and the matter is vending in all cases for adjudication before the Hon'ble Supreme Court.
3. The issue in this appeal relates to the disallowance of carry forward of deficit to be set of against the income of the subsequent years, in case of the trust.
I have heard both the counsel and perused the records. It transpires that upon Assessing Officer’s (AO) disallowance on the above said issue, the ld. CIT(A) has allowed the assessee's appeal by following the Hon'ble jurisdictional High Court’s direct decision on the issue. Both the counsel fairly agreed that the issue is covered in favour of the assessee by the decision of Hon'ble jurisdictional High Court relied upon by the ld. CIT(A). The Revenue has also agreed to this in the grounds for appeal raised herein above, as it is mentioned that the Department has not accepted the Hon’ble High Court's decision on these issues. Be that as it may, the Hon'ble jurisdictional High Court’s decision is binding upon the ITAT. In this regard, I may gainfully refer to the order of ld. CIT(A) on the issue as under:
Disallowance of carryforward of deficit to be set off against the income of the subsequent year.
3 (A.Y. 2012-13) ITO-(E) vs. Seth Walchand Hirachand Loka-Kalyan Trust 5.2 I have considered the facts and circumstances of the case, gone through the assessment order of the A.O and the submissions of the appellant and also discussed the case with the AR of the appellant. The contentions and submissions of the appellant are being discussed and decided here in under: i. An identical issue had arisen in appellant's own case in A.Y. 2010-11 wherein the carry forward of deficit was disallowed by AO which was upheld by CIT(A). The appellant preferred appeal before Hon'ble ITAT, who vide order dated 6.1.2017 have allowed the appeal observing as under: 'We have considered the rival contention of the parties and seen that Hon'ble Bombay High Court in case of CIT vs. Institute of Banking (supra), while considering the similar ground held as under : "In the present case, the Assessing Officer did not allow carry forward of the excess of expenditure to be set off against the surplus of the subsequent years on the ground that in the case of a charitable trust, their income was assessable under self-contained code mentioned in section 11 to section 13 of the Income-Tax Act and that the income of the charitable trust was not assessable under the head "Profits and gains of business" u/s. 28 in which the provision for carry forward of losses was relevant. That, in the case of a char/table trust, there was no provision for carry forward of the excess of expenditure of earlier years to be adjusted against income of the subsequent years. We do not find any merit in this argument of the Department. Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which adjustment has been made having regard to the benevolent provisions contained in section 11 of the Act and that such adjustment will have to be excluded from the income of the trust u/s. 11(l)(a) of the Act. Our view is also supported by the judgment of the Gujarat High Court in the case of CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal [1995] 211 ITR 293. Accordingly, we answer questin No. 3 in the affirmative, i.e., in favour of the assesses and against the Department"
4 (A.Y. 2012-13) ITO-(E) vs. Seth Walchand Hirachand Loka-Kalyan Trust Thus, respectfully following the decision ofjurisdictionat High Court, we find that the grounds of appeal raised in the present appeal are squarely covered in assesse's favour. Hence/ the appeal of the assessee is allowed. As a result, appeal filed by assessee is stands allowed.
5. Since the ld. CIT(A) has followed the Hon'ble jurisdictional High Court decision mentioned here-in-above, I do not find any infirmity in the same. Hence, I uphold the order of ld. CIT(A).
6. In the result, this appeal filed by the Revenue stands dismissed. प�रणामतः राज�व क� अपील खा�रज क� जाती है । Order pronounced in the open court on 10.10.2017 Sd/- (Shamim Yahya) लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 10.10.2017 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,