“application of income”

Judicial DoctrinesDiversion vs ApplicationDiversion vs Application1,603 judgments

The decision most relied on for application of income is Maxopp Investment Ltd. v. CIT (402 ITR 640), cited in 1,596 judgments on BharatTax.

Leading authorities on application of income

Maxopp Investment Ltd. v. CIT

402 ITR 640 · 2018 · Supreme Court

1,596

citing judgments

Disallowance under Section 14A is not automatic and requires the Assessing Officer to record satisfaction before applying Rule 8D. Only investments yielding exempt income are considered for disallowance, irrespective of their strategic nature.

Godrej & Boyce Mfg. Co. Ltd. v. DCIT

328 ITR 81 · 2010 · High Court

1,183

citing judgments

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

CIT v. Max India Ltd.

295 ITR 282 · 2007 · Supreme Court

1,162

citing judgments

Under Section 263, an assessment order is not erroneous and prejudicial to the interest of the revenue merely because the Principal Commissioner disagrees with the Assessing Officer's (AO) view, particularly if the AO has adopted one of two permissible views in law, unless that view is completely unsustainable. If due inquiries were made, the AO's order does not become erroneous solely because the fact of inquiries was not recorded.

Godrej & Boyce Manufacturing Company Ltd. v. DCIT

394 ITR 449 · 2017 · Supreme Court

683

citing judgments

Expenditure can only be disallowed under Section 14A if the income is exempt and not part of the total income. The Assessing Officer must first record dissatisfaction with the assessee's accounts or computation before proceeding to make a disallowance under Section 14A or applying Rule 8D.

Commissioner of Income Tax v. Nova Promoters and Finlease (P) Ltd.

342 ITR 169 · 2012 · High Court

658

citing judgments

To make an addition under Section 68 for unexplained cash credits, the Assessing Officer must conduct proper inquiry into the identity, genuineness, and creditworthiness of the creditor, especially concerning share application money. The assessee's initial discharge of burden by providing necessary details shifts the onus back to the AO for further investigation, including the source of source.

Olari Little Flower Kuries (P.) Ltd. v. UOI

440 ITR 26 · 2022 · High Court

614

citing judgments

The fee under Section 234E of the Income-tax Act cannot be levied for defaults in filing TDS statements committed prior to June 1, 2015, as the provision for its levy became effective only from that date.

Dilip N. Shroff v. JCIT

291 ITR 519 · 2007 · Supreme Court

565

citing judgments

A penalty notice issued under Section 271(1)(c) is invalid if the Assessing Officer fails to strike out the inapplicable limb (concealment or furnishing inaccurate particulars) from the standard proforma, indicating non-application of mind. The initial burden of proving concealment or inaccurate particulars rests on the Revenue.

CIT v. Kaushalya

216 ITR 660 · 1995 · High Court

511

citing judgments

A penalty levied under Section 271(1)(c) for concealment or furnishing inaccurate particulars of income is not invalidated by the Assessing Officer's failure to strike off irrelevant portions in the show cause notice, provided the assessee understood the exact charge and suffered no prejudice, indicating an application of mind by the AO.

Judgments citing application of income

Ummeed Child Development Center, Mumbai vs. ITO (Exem)-2(4), Mumbai

In the result, appeal of the assessee is allowed

ITA 1838/MUM/2023[2015-16]Status: DisposedITAT Mumbai06 Nov 2023AY 2015-16

Bench: Shri Kuldip Singh & Shri Gagan Goyal & Ummeed Child Development Centre, Gr. Floor, 1-B, 1/62 Mantri Pride, N. M. Joshi Marg, Lower Parel, Mumbai-400 011 ...... Appellant Vs. Ito (Exe.) – 2 (4), R. No. 503, 5Th Floor, Piramal Chambers, Lal Baug, Parel, Pan – Aaatu0678E ..... Respondent

For Appellant: Shri Saurabh Bhat, Ld. ARFor Respondent: Shri Ujjawal Kumar, Ld. DR

Section 11(6)Section 12ASection 250

erred on facts and in circumstances of the case and in law, in confirming the disallowance of Rs. 19,69,709/- out of application of income being depreciation claimed on fixed assets; 2. The CITA failed to appreciate that the appellant had never claimed the cost of assets as application ... restriction u/s. 11(6) of the Income-tax Act, 1961 only applies in cases where cost of capital asset has been claimed as application of income by the assessee trust, which is not the case in your appellant's circumstances; 4. The appellant prays to your Honours to direct

Shree Narmada Khand Udyog Sahkari Mandali Ltd., Narmada vs. Income Tax Officer, Ward - 2(1), Bharuch

In the result, the grounds of appeal raised by the assesse are allowed

ITA 104/SRT/2023[2014-15]Status: DisposedITAT Surat31 Oct 2023AY 2014-15

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini

Section 234ASection 254(1)Section 271(1)(c)Section 28Section 37Section 37(1)

ordinary principles of commercial trading and commercial accounting. The Court further noted that the expenditure in question cannot be termed to be application of income in absence of any evidence as to accrual of profits in light of settled legal position; the payment of additional/final price made on the last

Shree Narmada Khand Udyog Sahkari Mandali Ltd., Narmada vs. Income Tax Officer, Ward - 2(1), Bharuch

In the result, the grounds of appeal raised by the assesse are allowed

ITA 103/SRT/2023[2013-14]Status: DisposedITAT Surat31 Oct 2023AY 2013-14

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini

Section 234ASection 254(1)Section 271(1)(c)Section 28Section 37Section 37(1)

Shree Narmada Khand Udyog Sahkari Mandali Ltd., Narmada vs. Income Tax Officer, Ward - 2(1), Bharuch

In the result, the grounds of appeal raised by the assesse are allowed

ITA 102/SRT/2023[2012-13]Status: DisposedITAT Surat31 Oct 2023AY 2012-13

Bench: Shri Pawan Singh & Dr. Arjun Lal Saini

Section 234ASection 254(1)Section 271(1)(c)Section 28Section 37Section 37(1)

Amalsad Vibhag Kelvani Mandal, Amalsad, Na vs. Arivs.Income Tax Officer, Exemption Ward, Surat

In the result, this ground of appeal is allowed

ITA 213/SRT/2022[2014-15]Status: DisposedITAT Surat31 Oct 2023AY 2014-15

Bench: Shri Pawan Singh(Physical Hearing) Amalsad Vibhag Kelvani Mandal, I.T.O., C/O-H.D.S.M. High School, Exemption Ward, Vs. Amalsad, Room No. 105, Anavil Dist.-Navsari-396310. Business Centre, Adajan Pan No. Aaata 3923 C Hazira Road, Adajan, Surat. Appellant/ Assessee Respondent/ Revenue

Section 11Section 11(1)(d)Section 12ASection 24Section 254(1)

assessee has claimed expenses of Rs. 2,86,530/- under the head “Education Expenses”. The assessee has not claimed such expenses as application of income for the object of trust. On further perusal of details, the Assessing officer found that the penalty was paid for violation of provision of Foreign

Smt Sunitha Prem Victor, Trivandrum vs. ITO Ward 2(3), Trivandrum

In the result, the assessee’s appeal is partly allowed for statistical purposes

ITA 1009/COCH/2022[2014-15]Status: DisposedITAT Cochin30 Oct 2023AY 2014-15

Bench: Shri Sanjay Arora & Shri Manomohan Dassunita Prem Victor The Income Tax Officer Tc 25/2813 Mathrubhumi Road Ward – 2(3) Vs. Vanchiyoor, Trivandrum 695035 Trivandrum [Pan:Akopv8566C] (Appellant) (Respondent) Assessee By: Ms. Divya Ravindran, Advocate Revenue By: Smt. J.M. Jamuna Devi, Sr. D.R. Date Of Hearing: 11.10.2023 Date Of Pronouncement: 30.10.2023 O R D E R Per Sanjay Arora, Am This Is An Appeal By The Assessee Against The Order Dated 26.10.2022 By The Commissioner Of Income Tax (Appeals), Nfac, Delhi [Cit(A)],Partly Allowing Her Appeal Contesting Her Assessment Under Section 143(3) Of The Income Tax Act, 1961 (Hereinafter ‘The Act’) Dated 27.12.2016 For Assessment Year (Ay) 2014-15. 2. The Brief Facts Of The Case Are That The Assessee Returned Her Income For The Relevant Year On 18.12.2014 At Rs.5,67,250, Claiming Deduction Under Section 54 Of The Act At Rs.91,05,096 In Respect Of Construction Of A Residential House During The Relevant Year Against The Capital Gain Arising To Her On Sale Of 3 Pieces Of Land Sold During March, 2013 To November, 2013. The Claim Was, Admitting Her Mistake Inasmuch As The Capital Asset/S Sold Was Not A Residential House, Requested By The Assessee Vide Letter Dated 29.11.2016 For Being Considered U/S. 54F Of The Act; She Not Owning Any Other Residential House On The Date Of Transfer/S. Earlier, On 25.11.2016, A Revised Statement Of Income Was Filed Claiming Exemption With Reference To The Total

For Appellant: Ms. Divya Ravindran, AdvocateFor Respondent: Smt. J.M. Jamuna Devi, Sr. D.R

Section 139(1)Section 139(4)Section 139(5)Section 143(3)Section 54Section 54F

applied during the current year. The capital gain for the current year is to be accordingly reworked by excluding the same. The application of income, which entails deduction u/s. 54F of the Act, shall stand adjusted accordingly, i.e., excluding the amount regarded as applied in respect of the capital gain

Central Academy Jodhpur Education Society, Jodhpur vs. Circle(Exemp.), Jaipur

In the result, this appeal of the assessee is allowed for statistical

ITA 543/JPR/2023[2017-18]Status: DisposedITAT Jaipur30 Oct 2023AY 2017-18

Bench: HON’BLE SHRI SANDEEP GOSAIN, JM & HON’BLE SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri P.C. Parwal, CAFor Respondent: Shri Anoop Singh (Addl. CIT)

Section 11Section 11(5)Section 12ASection 13(1)(c)Section 13(3)Section 142(1)Section 143(1)Section 143(2)Section 164(2)Section 2

directing the AO to delete the disallowance made out of salary paid to specified person, reduce the disallowance of interest out of application of income and to allow exemption u/s 11 on the surplus declared by the assessee.” 4. On the other hand, the ld. D/R relied on the orders

Wholery Infrastructure Private Limited, Kota, Rajasthan vs. Dy. Commissioner of Income Tax, Circle-2, Kota, Rajasthan

In the result, the appeal filed by the assessee is allowed

ITA 525/JPR/2023[2017-18]Status: DisposedITAT Jaipur30 Oct 2023AY 2017-18

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Vijay Goyal, CAFor Respondent: Smt. Monisha Choudhary, Addl. CIT

Section 139(9)Section 154Section 154(1)(a)Section 44A

perused the material available on record. We note that the assessee filed its return of income on 17-06-2015. The assessee claimed application of income to its objectives to an extent of Rs.61,07,545/-, accumulation of income of Rs.18,86,808/-. The objection of CIT(A) was that

Supreme Buildestates Pvt Ltd, Madanganj- Kishangarh vs. DCIT Circle 2 Ajmer, Jaipur Road Ajmer

In the result, appeal of the assessee is allowed

ITA 495/JPR/2023[2020-21]Status: DisposedITAT Jaipur30 Oct 2023AY 2020-21

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri C.M. Agarwal (C.A.)For Respondent: Sh. Anup Singh (Addl. CIT) a

Section 115JSection 142(1)Section 143(2)Section 143(3)Section 144BSection 2Section 234BSection 37Section 80Section 80G

same is incurred wholly and exclusively for the purposes of carrying on business or profession. As the CSR expenditure (being an application of income) is not incurred for the purposes of carrying on business, such expenditure cannot be allowed under the existing provisions of section 37 of the Income

B.G. Professional Education Society, Jaipur vs. Exemption Ward 1, Jaipur

In the result, this appeal of the assessee is allowed for statistical purposes

ITA 311/JPR/2023[2019-20]Status: DisposedITAT Jaipur30 Oct 2023AY 2019-20

Bench: HON’BLE SHRI SANDEEP GOSAIN, JM & HON’BLE SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri SL Jain, AdvocateFor Respondent: Smt. Monisha Choudhary (Addl. CIT)

Section 11Section 11(1)(a)Section 143(1)Section 154Section 234ASection 250

grossly erred in confirming the order of ld. ADIT CPC whereas he rejected the claim of Rs. 2,20,066/- in relation of Application of Income under section 11(1)(a) OF Income Tax Act, arbitrarily on erroneous facts and superfluous reasons without bringing out the relevant material facts

National Stock Exchange of India Ltd, Mumbai vs. DCIT, Cir-7(1)(1), Mumbai

In the result ground no.1 of the appeal of the assessee is allowed and grounds no

ITA 730/MUM/2023[2016-17]Status: DisposedITAT Mumbai26 Oct 2023AY 2016-17

Bench: Shri Aby T Varkey & Shri Amarjit Singhita Nos.730 & 731/Mum/2023 (A.Ys. 2016-17 & 2017-18) National Stock Exchange Vs. Dcit, Circle 7(1)(1) Of India Limited Room No. 126, 1 St Floor, Exchange Plaza, Bandra Aaykar Bhavan, Kurla Complex, Bandra M.K. Road, East, Mumbai – 400051 Churchgate -400 020 स्थायी लेखा सं./जीआइआर सं./ Pan/Gir No: Aaacn1797L Appellant .. Respondent

For Appellant: Jehangir Mistri Sr. AdvFor Respondent: Srinivasu

item of expenditure in the hands of the counter party, the apt example being voluntary contributions made to Trust. The contributions are only application of income in the hands of the contributor. Here even though there is a sanction from a statutory authority, it does not mean that ... would have done so. In the absence of the same it is not an admissible expenditure under section 37 for it is application of income as per the directives of SEBI for a specific purpose, similar to CSR and CRR as mentioned by the AO. For the impugned assessment year

Dy. Commissioner O Income Tax (Exemption)-2(1), Mumbai vs. Shree Sai Baba Sansthan Trust(Shirdi), Mumbai

In the result, appeal of assessee is partly allowed and appeals of the revenue are dismissed

ITA 3210/MUM/2022[2017-18]Status: DisposedITAT Mumbai25 Oct 2023AY 2017-18

For Appellant: Shri S. Ganesh – Sr. CounselFor Respondent: Dr Kishor Dhule (CIT-DR)

Section 10Section 115BSection 12ASection 143(2)Section 80G

trusts or institutions is exempt from income-tax under sections 11 and 12, subject to the fulfilment, inter alia, of certain conditions of application of income and investment in specified modes. Similarly, income of any university or other educational institution referred to in sub-clause (iiiad) or sub-clause ... cent was held to be allowable not on total income as computed under the IT Act. Any amount or expenditure, which was application of income, is not to be considered for determining twenty five per cent to be accumulated. Their Lordships, as noted earlier, affirmed the decision of Kerala High

Dy. Commissioner O Income Tax (Exemption)-2(1), Mumbai vs. Shree Sai Baba Sansthan Trust(Shirdi), Mumbai

In the result, appeal of assessee is partly allowed and appeals of the revenue are dismissed

ITA 3209/MUM/2022[2018-19]Status: DisposedITAT Mumbai25 Oct 2023AY 2018-19

For Appellant: Shri S. Ganesh – Sr. CounselFor Respondent: Dr Kishor Dhule (CIT-DR)

Section 10Section 115BSection 12ASection 143(2)Section 80G

Dy. Commissioner of Income Tax (Exemption) 2(1), Mumbai vs. Shree Sai Baba Sansthan Trust (Shirdi), Mumbai

In the result, appeal of assessee is partly allowed and appeals of the revenue are dismissed

ITA 3049/MUM/2022[2015-16]Status: DisposedITAT Mumbai25 Oct 2023AY 2015-16

For Appellant: Shri S. Ganesh – Sr. CounselFor Respondent: Dr Kishor Dhule (CIT-DR)

Section 10Section 115BSection 12ASection 143(2)Section 80G

Shree Sai Baba Sansthan Trust (Shirdi), Mumbai vs. Dy. Commissioner of Income Tax (Exemption) 2(1), Mumbai

In the result, appeal of assessee is partly allowed and appeals of the revenue are dismissed

ITA 3010/MUM/2022[2015-2016]Status: DisposedITAT Mumbai25 Oct 2023AY 2015-2016

For Appellant: Shri S. Ganesh – Sr. CounselFor Respondent: Dr Kishor Dhule (CIT-DR)

Section 10Section 115BSection 12ASection 143(2)Section 80G

M/S Gian Sagar Educational & Charitable Trust, Chandigarh vs. DCIT, New Delhi

In the result, appeal of the assessee is allowed

ITA 3801/DEL/2016[2012-13]Status: DisposedITAT Delhi19 Oct 2023AY 2012-13

Bench: Shri C.M. Garg & Shri M. Balaganeshm/S. Gian Sagar Educational Vs. Dcit & Charitable Trust, Central Circle-29, Sco 10-110, Sector 43B, New Delhi Chandigarh (Appellant) (Respondent) Pan:Aaatg5827B

For Appellant: Shri Ravi Pratap Mall, AdvFor Respondent: Md. Gayasuddin Ansari, CIT DR

Section 115Section 115BSection 133(6)

wrongly considered the donations in 37 cases as non-genuine and further, the A.O. has not given the benefit of set off of application of income against the receipt of the assessee trust. (ii) The appellant has submitted that in A.Y. 2008-09, the A.O. has made the addition ... Vikas Samiti is treated as anonymous donation and is taxable us 115 BBC of LT. Act & no deduction is allowable on account of application of income under subsection (7) of section 13 of IT Act, 1961. As far as the balance donations are concerned, the enquiry conducted during the original

DCIT- 3(4), Mumbai vs. M/S Reliance Industries Limited, Mumbai

In the result, both the appeals of the assessee and both the appeals of the revenue are treated as partly allowed

ITA 2588/MUM/2022[2018-19]Status: DisposedITAT Mumbai18 Oct 2023AY 2018-19

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 14ASection 250(6)Section 32Section 35

DCIT-3(4), Mumbai vs. M/S Reliance Industries Limited, Mumbai

In the result, both the appeals of the assessee and both the appeals of the revenue are treated as partly allowed

ITA 2587/MUM/2022[2017-18]Status: DisposedITAT Mumbai18 Oct 2023AY 2017-18

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 14ASection 250(6)Section 32Section 35

Reliance Industries Limited, Mumbai vs. Dy Commissioner of Income Tax Circle-3(4), Mumbai

In the result, both the appeals of the assessee and both the appeals of the revenue are treated as partly allowed

ITA 2318/MUM/2022[2017-18]Status: DisposedITAT Mumbai18 Oct 2023AY 2017-18

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 14ASection 250(6)Section 32Section 35

Reliance Industries Ltd., Mumbai vs. ACIT Circle 3(4), Mumbai

In the result, both the appeals of the assessee and both the appeals of the revenue are treated as partly allowed

ITA 2317/MUM/2022[2018-19]Status: DisposedITAT Mumbai18 Oct 2023AY 2018-19

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 14ASection 250(6)Section 32Section 35