“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

M/S. Amara Jyothi Education Trust, Bangalore vs. Deputy Director of Income Tax, Bangalore

In the result, both the appeals filed by the assessee stands allowed

ITA 690/BANG/2017[2010-11]Status: DisposedITAT Bangalore21 Jun 2022AY 2010-11

Bench: Shri. Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri V. Chandrashekar

Section 11(1)(a)Section 12ASection 143(3)Section 250

accordance with the provisions of IT Act. In other words, whether outgoings from out of gross income which are in the nature of application of income, should be first deducted from the gross income and 25 per cent of only the remaining amount should be allowed to be accumulated ... 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

Shri Shridevi Charitable Trust, Tumkur vs. Deputy Commissioner of Income Tax (Exemptions) Circle-1, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 227/BANG/2022[2014-15]Status: DisposedITAT Bangalore10 Jun 2022AY 2014-15

Bench: Smt. Beena Pillai & Ms. Padmavathy S

For Appellant: Shri. Sandeep Chalapathy, CAFor Respondent: Smt. Susan Dolores George, CIT(OSD)(DR)(ITAT)

Section 11Section 154

facts in holding that the repayment of loan of Rs. 6,80,69,334/- cannot be allowed as an application of income as the same amounts to double deduction. 7.2 That the learned Commissioner of Income Tax (Appeals) ought to have appreciated the fact that the appellant did not claim ... purchase of asset as an application of income therefore, the appellant's claim of repayment of loan as an application of income will not amount to double deduction. 7.3 That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in not considering the fact that

Shri Shridevi Charitable Trust, Tumkur vs. Deputy Commissioner of Income Tax (Exemptions), Circle-1, Bangalore

In the result, the appeal is allowed for statistical purposes

ITA 226/BANG/2022[2013-14]Status: DisposedITAT Bangalore10 Jun 2022AY 2013-14

Bench: Smt. Beena Pillai & Ms. Padmavathy S

For Appellant: Shri. Sandeep Chalapathy, CAFor Respondent: Smt. Susan Dolores George, CIT(OSD)(DR)(ITAT)

Section 11Section 11(1)(a)Section 11(2)Section 12ASection 80G(5)(vi)

ought to have held that the deduction u/s. 11(1)(a) of the Act has to be allowed on gross receipts before application of income and accumulation u/s. 11(2) of the Act. The assessee is a charitable trust running various education 4. institutions. The assessee is registered under section

The Nab Workshop for the Blind, Mumbai vs. DCIT(CPC), Banglore, Bangalore

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

ITA 1646/MUM/2020[2016-17]Status: DisposedITAT Mumbai09 Jun 2022AY 2016-17

Bench: Shri Pavan Kumar Gadale & Shri Gagan Goyalthe Nab Workshop For Vs. Dcit (Cpc) The Blind, 4Th Floor, Piramal Dr. Annie Besant Road, Chambers, Parel, Worli, Mumbai-400012. Mumbai – 400 030. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaatt3397F Appellant .. Respondent Appellant By : Shri. Gautam Nayak.Ar Respondent By : Shri. Pramod Nikalje.Dr Date Of Hearing 14.06.2022 Date Of Pronouncement 20.06.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Order Of The Commissioner Of Income Tax (Appeal)-1,Mumbai Passed U/S 143(1) & 250 Of The Act. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Shri. Gautam Nayak.ARFor Respondent: Shri. Pramod Nikalje.DR

Section 11(2)Section 11(3)Section 143(1)

assessing officer's action of disallowing set off of deficit of Rs.43,52, 320 of the current year on account of excess application of income, against the deemed income taxable under section 11(3) of Rs.54,38,485, while making the intimation under section 143(1). The NAB Workshop

Siddhagiri Gurukul Foundation, Mumbai vs. CIT (Exemption), Mumbai

Appeal of the assessee is allowed

ITA 625/MUM/2021[2016-17]Status: DisposedITAT Mumbai31 May 2022AY 2016-17

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm The Cit (Exemption) Siddhagiri Gurukul Foundation Room No. 617, 6Th Floor, Siddharameshwar Mandir, Jayrameshwar Co-Op Hsg. Soc., Piramal Chambers, Vs. S.V. Road, Goregaon, Lalbaug, Parel, Mumbai-400 062 Mumbai-400 012 (Appellant) (Respondent) Pan No. Aacts0759G

For Appellant: Shri Rajesh Sanghvi, ARFor Respondent: Shri Ajit K. Shrivastava, CIT DR

Section 11Section 11(6)Section 12Section 143Section 24Section 263

Rs.53,69,863/- in the gross receipts of the trust. b. Depreciation of Rs.1,27,86,297 is not to be allowed as application of income in view of the provisions of Sec.11(6) of the Act. Even though there is no change in the Total Income of the trust ... Computed by AO at Rs. NIL and as per Return of Income filed as the trust fulfils the criteria of application of income of 85% of gross receipts even after taking into account above two aspects). The appellant therefore prays that the order of the CIT be annulled. The appellant

F.E. Dinshaw Charities, Mumbai vs. ADIT (E)I(2), Mumbai

ITA 3287/MUM/2019[2005-06]Status: DisposedITAT Mumbai27 May 2022AY 2005-06

Bench: Shri M. Balaganesh & Shri Kuldip Singh

For Appellant: Ms. Krupa Gandhi, A.RFor Respondent: Shri Rajat Mittal, D.R

Section 1(11)Section 11Section 11(1)Section 143(3)Section 147Section 148

assessment years 2004-05 & 2005-06 on identically worded grounds except the difference in amount of addition on account of non application of income within stipulated time inter alia that:- “GROUND 1: RE-OPENING OF ASSESSMENT IS INVALID: 1. On the facts and in the circumstances of the case ... void. WITHOUT PREJUDICE TO GROUND 1: GROUND II: ADDITION U/S. 11(1B) OF THE ACT ON THE ALLEGED GROUND THAT THERE WAS NON APPLICATION OF INCOME WITHIN THE STIPULATED TIME AMOUNTING TO RS.14,70,369: 1. On the facts and in the circumstances of the case

F.E. Dinshaw Charities, Mumbai vs. ADIT (E)I(2), Mumbai

ITA 3286/MUM/2019[2004-05]Status: DisposedITAT Mumbai27 May 2022AY 2004-05

Bench: Shri M. Balaganesh & Shri Kuldip Singh

For Appellant: Ms. Krupa Gandhi, A.RFor Respondent: Shri Rajat Mittal, D.R

Section 1(11)Section 11Section 11(1)Section 143(3)Section 147Section 148

Axis Bank Foundation, Mumbai vs. CIT (Exemption), Mumbai

In the result, the present appeal is allowed

ITA 892/MUM/2021[2015-16]Status: DisposedITAT Mumbai20 May 2022AY 2015-16

For Appellant: Shri Soumen Adak

Section 11Section 12ASection 143(2)Section 143(3)Section 263

justification is available to allow the AO to make independent re-verification with regards to movement of funds and verify the application of income as these were duly and sufficiently verified by the AO at the time of original assessment proceeding vide order dated 08 December 2017. Ground 2 – Without

Assistant Commissioner of Income Tax Circle - 1, Bellary vs. M/S Auro Minerals, Hospet

In the result, appeal of the Revenue is partly allowed and that of the Assessee allowed

ITA 1543/BANG/2018[2012-13]Status: DisposedITAT Bangalore18 May 2022AY 2012-13

Bench: Shri N. V. Vasudevan & Ms. S. Padmavathy

For Appellant: Shri. Percy Pardiwala, Sr. AdvocateFor Respondent: Shri. Srinivas T. Bidari, CIT(DR)(ITAT), Bengaluru

Section 143(3)

initiated proceedings for revision of the AO’s order on the ground that the sum of RS.2,59,09,307 was an application of income and therefore cannot be allowed as a deduction. He was also of the view that the sum of Rs.6,05,00,000/- being compensation paid

M/S Auro Minerals, Hospet vs. Joint Commissionerof Income Tax Bellary Range, Bellary

In the result, appeal of the Revenue is partly allowed and that of the Assessee allowed

ITA 1329/BANG/2018[2012-13]Status: DisposedITAT Bangalore18 May 2022AY 2012-13

Bench: Shri N. V. Vasudevan & Ms. S. Padmavathy

For Appellant: Shri. Percy Pardiwala, Sr. AdvocateFor Respondent: Shri. Srinivas T. Bidari, CIT(DR)(ITAT), Bengaluru

Section 143(3)

M/S Moogambigal Charitable and Educational Trust, Bangalore vs. Addldit, Bangalore

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

ITA 1224/BANG/2015[2011-12]Status: DisposedITAT Bangalore29 Apr 2022AY 2011-12

Bench: Smt.Beena Pillai, Jm & Ms.Padmavathy S, Am

For Appellant: Sri.Ravishankar, AdvocateFor Respondent: Sri.Sumer Singh Meena, CIT-DR

Section 10Section 11Section 12ASection 143(3)Section 4A

incidental to the objects of the trust and that the sales of the pharmacy is duly considered for the purpose of application of income. The CIT(A) dismissed the contentions of the assessee on the basis that the assessee has not furnished any evidence regarding the breakup of the medicines

Life Insurance Corporation of India, Mumbai vs. ACIT 3(2)(1), Mumbai

In the result, appeal of the assessee is dismissed

ITA 3403/MUM/2019[2015-16]Status: DisposedITAT Mumbai08 Apr 2022AY 2015-16

Bench: Shri Pramod Kumar, Vice- & Shri Vikas Awasthyआअसं.2908/मुं/2019 ("न.व .2015-16) The Acit 3(2)(1), Room No.674, 6Th Floor, Aaykar Bhavan, M.K.Road, ...... अपीलाथ" /Appellant Mumbai – 400 020 बनाम Vs. Life Insurance Corporation Of India, Central Office, Yogakshema Jeevan Bima Marg, Nariman Point, Mumbai 400 005. Pan: Aaacl-0582-H ..... ""तवाद"/Respondent आअसं. 3403/मुं/2019 ("न. व .2015-16) Life Insurance Corporation Of India, Central Office, Yogakshema Jeevan Bima Marg, Nariman Point, Mumbai 400 005. ...... अपीलाथ" /Appellant Pan: Aaacl-0582-H बनाम Vs. The Acit 3(2)(1), Room No.674, 6Th Floor, Aaykar Bhavan, M.K.Road, ..... ""तवाद"/Respondent Mumbai – 400 02

For Appellant: Shri T. SankarFor Respondent: Shri Farrokh V. Irani

Section 10Section 10(34)Section 115OSection 14ASection 44

applied for some specific purpose it cannot be treated as charge on profit. We are of the opinion that it is application of income. Preparation of books of accounts as per the Insurance account is different from determining the tax liability under income tax. Income transferred to policy holders

ACIT 3(2)(1), Mumbai vs. Life Insurance Corporation of India, Mumbai

In the result, appeal of the assessee is dismissed

ITA 2908/MUM/2019[2015-16]Status: DisposedITAT Mumbai08 Apr 2022AY 2015-16

For Appellant: Shri T. SankarFor Respondent: Shri Farrokh V. Irani

Section 10Section 10(34)Section 115OSection 14ASection 44

Media Research Users Council, Mumbai vs. ADIT (E) 1(1), Mumbai

Appeal of the revenue is dismissed

ITA 6459/MUM/2012[2006-07]Status: DisposedITAT Mumbai29 Mar 2022AY 2006-07

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble & Media Research Users Council V. Addl. Dit(E)– 1(1) 128, Tv Industrial Estate Piramal Chambers, Lalbaug S.K. Ahire Marg, Worli Mumbai – 400 012 Mumbai – 400012 Pan: Aaatm5433F (Appellant) (Respondent) Media Research Users Council V. Addl. Dit(E)– Range 1 128, Tv Industrial Estate Piramal Chambers, Lalbaug S.K. Ahire Marg, Worli Mumbai – 400 012 Mumbai – 400012 Pan: Aaatm5433F (Appellant) (Respondent)

For Appellant: Shri Niraj ShethFor Respondent: Shri C.T. Mathews

Section 11Section 12ASection 13Section 13(1)(c)Section 13(3)(e)Section 25

section 13(3) will be tantamount to use or application for the benefit of such person. Further, to be regarded as use or application, the income which has been so used or applied must be identifiable. As regards the advance of Rs. 68,07,442 - applicability of Section ... requested by the assessee) If exemption under section 11 is allowed, the option of Rs. 12 Lakh would have been allowed as an application of income in Assessment year 2006-07. In the Assessment year 2007-08, the amount of Rs. 12 Lakh is deducted by the assessee itself

Media Research Users Council, Mumbai vs. Addl DIT (E) RG 1, Mumbai

Appeal of the revenue is dismissed

ITA 7108/MUM/2010[2007-08]Status: DisposedITAT Mumbai29 Mar 2022AY 2007-08

For Appellant: Shri Niraj ShethFor Respondent: Shri C.T. Mathews

Section 11Section 12ASection 13Section 13(1)(c)Section 13(3)(e)Section 25

DCIT CC 3 (1), Mumbai vs. M/S Jodhani Brothers, Mumbai

In the result, the appeal of the revenue is dismissed

ITA 1286/MUM/2020[2016-17]Status: DisposedITAT Mumbai28 Mar 2022AY 2016-17

Bench: Us:

For Appellant: Vartik ChokshiFor Respondent: S.N. Kabra

Section 143(2)Section 143(3)

offered in the return of income of Rs.2.5 crore was sufficient to take care of the undisclosed income as well as the undisclosed application of income. We don’t find any infirmity in the finding of the ld. CIT(A), therefore, this ground of appeal of the revenue stand dismissed

M/S Mysore Race Club Limited, Mysuru vs. The Deputy Commissioner of Income Tax Circle-1(2), Mysuru

In the result, the appeal filed by assessee stands allowed for statistical purposes

ITA 1480/BANG/2017[2011-12]Status: DisposedITAT Bangalore14 Mar 2022AY 2011-12

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiassessment Year : 2011-12 M/S. Mysore Race Club The Deputy Ltd., Commissioner Of Income Post Box No. 11, Tax, Race Course Road, Vs. Circle – 1 [2], Mysuru – 570 010. Mysuru. Pan: Aabcm5167G Appellant Respondent Assessee By : Shri S.V. Ravishankar, Advocate Revenue By : Shri Janardhan, Addl. Cit (Dr) Date Of Hearing : 04-03-2022 Date Of Pronouncement : 14-03-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Order Dated 28/10/2016 Passed By Ld.Cit(A), Mysore For Assessment Year 2011- 12 On Following Grounds Of Appeal: “1. The Order Of The Learned Commissioner Of Income-Tax [Appeals] In So Far As They Are Against The Appellant Is Opposed To Law, Equity & Weight Of Evidence, Probabilities, Facts & Circumstance Of The Case. 2. The Appellant Denies Itself Liable To Be Assessed Over & Above The Returned Income By It On The Facts & Circumstances Of The Case. 3. The Learned Commissioner Of Income-Tax [Appeals] Failed To Appreciate That The Amount Collected From Punters For Disbursement As Dividend To Punters Stands Diverted At Source By Virtue Of Overriding Title On The Facts & Circumstances Of The Case. [I]. The Learned Commissioner Of Income-Tax [Appeals] Failed To Appreciate That The Totalizator Collection From The Punters Stands Diverted At Source For Disbursement To Dividend To Punters On The Facts & Circumstances Of The Case. [Ii]. The Learned Commissioner Of Income-Tax [Appeals] Failed To Appreciate That Method Of Accounting Adopted By The Appellant Were Accepted By The Revenue From Past

For Appellant: Shri S.V. Ravishankar, AdvocateFor Respondent: Shri Janardhan, Addl. CIT (DR)

Section 40Section 40A

Ld.CIT(A). 4. The Ld.CIT(A) partly allowed the claim of assessee by considering the amount paid to the punters on winning as application of income as against diversion by overriding titles and submitted by assessee’s however upholding the disallowance of the amount paid other than

Assistant Commissioner of Income Tax 17(2)), Mumbai vs. Navjbai Ratan Tata Trust, Mumbai

In the result, appeal by the Revenue being ITA No

ITA 2162/MUM/2018[2014-15]Status: DisposedITAT Mumbai10 Mar 2022AY 2014-15

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

Section 11Section 13(1)(d)Section 164(2)Section 2Section 250

held that in case of charitable institution registered under section 12A, even though expenditure incurred for acquisition of capital assets was treated as application of income for charitable purpose under section 11(1)(a), yet depreciation would be allowed on assets so purchased. 12.4 It is also pertinent to note

Assistant Commissioner of Income Tax 17(2)), Mumbai vs. Navjbai Ratan Tata Trust, Mumbai

In the result, appeal by the Revenue being ITA No

ITA 2161/MUM/2018[2013-14]Status: DisposedITAT Mumbai10 Mar 2022AY 2013-14

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

Section 11Section 13(1)(d)Section 164(2)Section 2Section 250

Navjbai Ratan Tata Trust, Mumbai vs. Assistant Commissioner of Income Tax 17(2)), Mumbai

In the result, appeal by the Revenue being ITA No

ITA 2116/MUM/2018[2014-15]Status: DisposedITAT Mumbai10 Mar 2022AY 2014-15

Bench: Shri G.S. Pannu & Shri Sandeep Singh Karhail

Section 11Section 13(1)(d)Section 164(2)Section 2Section 250