Appeal Details
Counselvise Citation
[2021] 109 COUNSELVISE.COM (IT) 5608 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 10 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-02-2021
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2012-2013
Appeal Filed On
13-03-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA C BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, HONBLE ACCOUNTANT MEMBER & SRI SANJAY GARG, HONBLE JUDICIAL MEMBER) [VIRTUAL COURT HEARING] ITA NO. 499/KOL/2019 M/S. CALCUTTA CRICKET & FOOTBALL CLUB...............................................................................APPELLANT 10B, MIDDLETON ROW KOLKATA 700 071 [PAN : AACCC 6337 P] VS. INCOME TAX OFFICER, EXEMPTION WARD(1), KOLKATA.......................... RESPONDENT APPEARANCES BY: SHRI J.P. KHAITAN, SR. ADVOCATE & SHRI MANOJ KATARUKA, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI SUPRIYO PAL, ADDL. CIT D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JANUARY 13 TH , 2021 DATE OF PRONOUNCING THE ORDER : FEBRUARY 5 TH , 2021 ORDER PER J. SUDHAKAR REDDY, AM :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 25, KOLKATA, (HEREINAFTER THE LD.CIT(A)), PASSED U/S. 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 27/12/2018, FOR THE ASSESSMENT YEAR 2012-13. 2. THE SOLE ISSUE THAT ARISES FOR OUR CONSIDERATION IS THE MANNER IN WHICH THE AMOUNT IS CALCULATED FOR ACCUMULATION U/S 11(1)(A) OF THE ACT. THE ASSESSEE CALCULATED 15% OF THE GROSS INCOME FOR BEING ACCUMULATED OR SET APART FOR APPLICATION U/S 11(1)(A) OF THE ACT. THE ASSESSING OFFICER DEDUCTED EXPENDITURE INCURRED BY THE ASSESSEE ON AUDIT FEES, FILING FEES, AMOUNTING TO RS.1,35,822/- FROM THE GROSS INCOME DISCLOSED BY THE ASSESSEE AND GRANTED 15% OF THE NET INCOME AS ELIGIBLE FOR BEING ACCUMULATED OR SET APART FOR APPLICATION U/S 11(1)(A) OF THE ACT. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE LD. FIRST APPELLATE AUTHORITY UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. SR. ADVOCATE, SHRI J.P. KHAITAN, APPEARING FOR THE ASSESSEE RELIED ON THE PROPOSITIONS OF LAW LAID DOWN BY THE ITAT LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF KRISHI UTPADAN MANDI SAMITI V. DEPUTY COMMISSIONER OF INCOME-TAX, FAIZABAD CIRCLE REPORTED IN [2011] 131 ITD 335 (LUCKNOW) AND THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS BIRLA JANAHIT TRUST REPORTED IN [1994] 208 ITR 372 (CAL) , FOR THE PROPOSITION THAT, THE 15% OF THE GROSS INCOME SHOULD ALLOWED TO BE ACCUMULATED OR SET ASIDE AS PER THE THE ASSESSING OFFICER WAS WRONG IN DEDUCTING APPLICATION OF INCOME OF RS.1,35,822/ FROM THE INCOME AND THEN ALLOWING 15% OF THE BALANCE FOR BEING SET ASIDE OR ACCUMULATED U/S 11(1)(A) OF THE ACT. 5. THE L D. D/R RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT 15 PER CENT OF THE NET INCOME COMPUTED IN ACCORDANCE WITH THE COMMERCIAL PRINCIPLES SHOULD BE THE FIGURE WHICH SHOULD BE SET ASIDE AS ACCUMULATION U/S 11(1)(A) OF THE ACT. 6. AFTER HEARING RIV AL CONTENTIONS, WE FIND THAT THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF KRISHI UTPADAN MANDI SAMITI HONBLE SUPREME COURT. WE EXTRACT THE RELEVANT PART OF THE JUDGMENTS SUPREME COURT ON THIS ISSUE A) ADDL. CIT V. A.L.N. RAO CHARITABLE TRUST 252 (SC) , WHEREIN, IT WAS HELD AS FOLLOWS: 12. IN THE LIGHT OF THE AFORESAID DISCUSSION AND KEEPING IN VIEW THE ILLUSTRATION WHICH WE HAVE GIVEN EARLIER THE COMBINED OPERATION OF SECTION 11(1)(A) AND SECTION 11(2) AS APPLICABLE AT THE RELEVANT TIME WOULD YIELD THE FOLLOWING RESULT: (I) IF THE INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES DURING THE PREVIOUS YEAR IS RS. 1 LAKH AND IF RS. 20,000 THEREFROM ARE ACTUALLY APPLIED TO SUCH PURPOSES IN INDIA THEN THOSE RS. 20,000 WILL GET EXEMPTED FROM PAYMENT OF INCOME- TAX AS PER THE FIRST PART OF SECTION 11(1)(A) . (II) OUT OF THE REMAINING ACCUMULATED INCOME OF RS. 80,000 FOR THE PREVIOUS YEAR, A FURTHER SUM OF RS. 25,000 WILL GET EXEMPTED FROM PAYMENT OF INCOME 11(1)(A). THUS, OUT OF THE TOTAL INCOME DERIVED FROM PROPERTY AS AFORESAID D PREVIOUS YEAR, THAT IS, RS. 1 LAKH, RS. 45,000 IN ALL, WILL GET EXCLUDED FROM THE TAX NET ON A COMBINED OPERATION OF FIRST AND SECOND PART OF SECTION 11(1)(A). (III) THE AFORESAID CEILING OF RS. 25,000 OF ACCUMULATED INCOME FROM PROPERTY OF PR WILL GET LIFTED UNDER SECTION 11(2) TO THE EXTENT THE BALANCE OF SUCH ACCUMULATED INCOME IS INVESTED AS LAID DOWN BY SECTION 11(2). TO TAKE AN ILLUSTRATION IF, SAY, AN ADDITIONAL AMOUNT OF RS. 20,000 OUT OF THE BALANCE OF ACCUMULATED INCOME OF SECTION 11(2) THEN THIS ADDITIONAL AMOUNT OF RS. 20,000 OF ACCUMULATED INCOME WILL GET EXCLUDED FROM THE TAX NET AS PER SECTION 11(2). (IV) THE REMAINING BALANCE OF THE ACCUMULATED INCOME OUT OF RS. 55,000, THAT IS, RS. 35 NOT INVESTED AS PER SUB TRUST AND WILL NOT GET EXEMPTED FROM THE TAX NET. (V) IF ON THE OTHER HAND THE ENTIRE REMAINING ACCUMULATED INCOME OF RS. 55,000 IS WHOLLY INVESTED AS PER SECTION 11(2) THE SAID ENTIRE AMOUNT OF RS. 55,000 WILL GET EXEMPTED FROM THE TAX NET. 2 ITA NO. 499/KOL/2019; M/S. CALCUTTA CRICKET & FOOTBALL CLUB ACCUMULATED OR SET ASIDE AS PER THE PROVISIONS OF SECTION 11(1)(A) OF THE ACT AND THAT THE ASSESSING OFFICER WAS WRONG IN DEDUCTING APPLICATION OF INCOME OF RS.1,35,822/ FROM THE INCOME AND THEN ALLOWING 15% OF THE BALANCE FOR BEING SET ASIDE OR ACCUMULATED U/S 11(1)(A) OF THE ACT. D. D/R RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT 15 PER CENT OF THE NET INCOME COMPUTED IN ACCORDANCE WITH THE COMMERCIAL PRINCIPLES SHOULD BE THE SET ASIDE AS ACCUMULATION U/S 11(1)(A) OF THE ACT. AL CONTENTIONS, WE FIND THAT THE LUCKNOW BENCH OF THE TRIBUNAL KRISHI UTPADAN MANDI SAMITI (SUPRA), HAS RELIED ON TWO JUDGMENTS OF THE WE EXTRACT THE RELEVANT PART OF THE JUDGMENTS ON THIS ISSUE FOR READY REFERENCE:- ADDL. CIT V. A.L.N. RAO CHARITABLE TRUST [1995] 216 ITR 697/ 83 TAXMAN WHEREIN, IT WAS HELD AS FOLLOWS: - IN THE LIGHT OF THE AFORESAID DISCUSSION AND KEEPING IN VIEW THE ILLUSTRATION WHICH WE HAVE GIVEN EARLIER THE COMBINED OPERATION OF SECTION 11(1)(A) AND SECTION 11(2) AS APPLICABLE AT THE RELEVANT TIME WOULD YIELD THE FOLLOWING RESULT: DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES DURING THE PREVIOUS YEAR IS RS. 1 LAKH AND IF RS. 20,000 THEREFROM ARE ACTUALLY APPLIED TO SUCH PURPOSES IN INDIA THEN THOSE RS. 20,000 WILL GET EXEMPTED FROM PAYMENT OF TAX AS PER THE FIRST PART OF SECTION 11(1)(A) . OUT OF THE REMAINING ACCUMULATED INCOME OF RS. 80,000 FOR THE PREVIOUS YEAR, A FURTHER SUM OF RS. 25,000 WILL GET EXEMPTED FROM PAYMENT OF INCOME - TAX AS PER SECOND PART OF SECTION 11(1)(A). THUS, OUT OF THE TOTAL INCOME DERIVED FROM PROPERTY AS AFORESAID D PREVIOUS YEAR, THAT IS, RS. 1 LAKH, RS. 45,000 IN ALL, WILL GET EXCLUDED FROM THE TAX NET ON A COMBINED OPERATION OF FIRST AND SECOND PART OF SECTION 11(1)(A). THE AFORESAID CEILING OF RS. 25,000 OF ACCUMULATED INCOME FROM PROPERTY OF PR WILL GET LIFTED UNDER SECTION 11(2) TO THE EXTENT THE BALANCE OF SUCH ACCUMULATED INCOME IS INVESTED AS LAID DOWN BY SECTION 11(2). TO TAKE AN ILLUSTRATION IF, SAY, AN ADDITIONAL AMOUNT OF RS. 20,000 OUT OF THE BALANCE OF ACCUMULATED INCOME OF RS. 55,000 IS INVESTED AS PER SECTION 11(2) THEN THIS ADDITIONAL AMOUNT OF RS. 20,000 OF ACCUMULATED INCOME WILL GET EXCLUDED FROM THE TAX NET AS PER SECTION 11(2). THE REMAINING BALANCE OF THE ACCUMULATED INCOME OUT OF RS. 55,000, THAT IS, RS. 35 NOT INVESTED AS PER SUB - SECTION (2) OF SECTION 11 WILL BE ADDED TO THE TAXABLE INCOME OF THE TRUST AND WILL NOT GET EXEMPTED FROM THE TAX NET. IF ON THE OTHER HAND THE ENTIRE REMAINING ACCUMULATED INCOME OF RS. 55,000 IS WHOLLY PER SECTION 11(2) THE SAID ENTIRE AMOUNT OF RS. 55,000 WILL GET EXEMPTED FROM M/S. CALCUTTA CRICKET & FOOTBALL CLUB PROVISIONS OF SECTION 11(1)(A) OF THE ACT AND THAT THE ASSESSING OFFICER WAS WRONG IN DEDUCTING APPLICATION OF INCOME OF RS.1,35,822/ - FROM THE INCOME AND THEN ALLOWING 15% OF THE BALANCE FOR BEING SET ASIDE OR D. D/R RELIED ON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT 15 PER CENT OF THE NET INCOME COMPUTED IN ACCORDANCE WITH THE COMMERCIAL PRINCIPLES SHOULD BE THE SET ASIDE AS ACCUMULATION U/S 11(1)(A) OF THE ACT. AL CONTENTIONS, WE FIND THAT THE LUCKNOW BENCH OF THE TRIBUNAL HAS RELIED ON TWO JUDGMENTS OF THE WE EXTRACT THE RELEVANT PART OF THE JUDGMENTS OF THE HONBLE [1995] 216 ITR 697/ 83 TAXMAN IN THE LIGHT OF THE AFORESAID DISCUSSION AND KEEPING IN VIEW THE ILLUSTRATION WHICH WE HAVE GIVEN EARLIER THE COMBINED OPERATION OF SECTION 11(1)(A) AND SECTION 11(2) AS DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES DURING THE PREVIOUS YEAR IS RS. 1 LAKH AND IF RS. 20,000 THEREFROM ARE ACTUALLY APPLIED TO SUCH PURPOSES IN INDIA THEN THOSE RS. 20,000 WILL GET EXEMPTED FROM PAYMENT OF OUT OF THE REMAINING ACCUMULATED INCOME OF RS. 80,000 FOR THE PREVIOUS YEAR, A FURTHER SUM TAX AS PER SECOND PART OF SECTION 11(1)(A). THUS, OUT OF THE TOTAL INCOME DERIVED FROM PROPERTY AS AFORESAID D URING THE PREVIOUS YEAR, THAT IS, RS. 1 LAKH, RS. 45,000 IN ALL, WILL GET EXCLUDED FROM THE TAX NET ON A THE AFORESAID CEILING OF RS. 25,000 OF ACCUMULATED INCOME FROM PROPERTY OF PR EVIOUS YEAR, WILL GET LIFTED UNDER SECTION 11(2) TO THE EXTENT THE BALANCE OF SUCH ACCUMULATED INCOME IS INVESTED AS LAID DOWN BY SECTION 11(2). TO TAKE AN ILLUSTRATION IF, SAY, AN ADDITIONAL AMOUNT RS. 55,000 IS INVESTED AS PER SECTION 11(2) THEN THIS ADDITIONAL AMOUNT OF RS. 20,000 OF ACCUMULATED INCOME WILL GET THE REMAINING BALANCE OF THE ACCUMULATED INCOME OUT OF RS. 55,000, THAT IS, RS. 35 ,000 IF SECTION (2) OF SECTION 11 WILL BE ADDED TO THE TAXABLE INCOME OF THE IF ON THE OTHER HAND THE ENTIRE REMAINING ACCUMULATED INCOME OF RS. 55,000 IS WHOLLY PER SECTION 11(2) THE SAID ENTIRE AMOUNT OF RS. 55,000 WILL GET EXEMPTED FROM 13. WE MAY ALSO AT THIS STAGE MENTION THAT THE KERALA HIGH COURT IN H.H. MARTHANDA VARMA ELAYARAJA OF TRAVANCORE TRUST'S CASE (SUPRA ), THE MADHYA PRADESH HIGH COUR IN MOHANLAL HARGOVINDDAS PUBLIC CHARITABLE TRUST'S CASE (SUPRA) , THE BOMBAY HIGH COURT IN TRUSTEES OF BHAT FAMILY RESEARCH FOUNDATION'S CASE (SUPRA) AND THE MADRAS HIGH COURT IN C.M. KOTHARI CHARITABLE TRUST'S CASE (SUPRA) HAVE TAKEN THE SAME VIEW AS TH E KARNATAKA HIGH COURT IN THE PRESENT CASE. WE APPROVE THE VIEW TAKEN IN THE AFORESAID DECISIONS. WE ALSO APPROVE THE SIMILAR VIEW TAKEN BY THE JAMMU & KASHMIR HIGH COURT IN SHRI KRISHEN CHAND CHARITABLE TRUST'S CASE (SUPRA) . THE LEARNED COUNSEL FOR THE R EVENUE, THEREFORE, HAS MADE OUT NO CASE FOR OUR INTERFERENCE WITH THE DECISION RENDERED BY THE DIVISION BENCH OF THE KARNATAKA HIGH COURT. 6.1. IN THE ABOVE CASE, THE HONBLE SUPREME COURT HAS BY WAY OF ILLUSTRATION LAID DOWN THAT 15% OF RS.1 LAKH, I.E., RS.20,000/- , SHOULD BE ALLOWED FOR ACCUMULATION OR SET ASIDE U/S 11(1)(A) OF THE ACT B) CIT V. PROGRAMME FOR COMMUNITY ORGANISATION TAXMAN 608 (SC) , 3. THE QUESTION THAT REALLY REQUIRES CONSIDERATION IS WHETHER, FOR THE PURPOSES OF SECTION 11(1)(A) OF THE INCOME OF EXEMPTION OF TWENTY BE ITS T OTAL INCOME DETERMINED FOR THE PURPOSES OF ASSESSMENT TO INCOME QUESTION HAS TO BE ANSWERED IN THE LIGHT OF THESE FACTS: THE ASSESSEE DONATIONS IN THE AGGREGATE SUM OF RS. 2,57,376. IT APPLIED THEREOUT FOR ITS CHARITABLE PURPOSES T 87,010. THE QUESTION IS WHETHER THE ASSESSEE IS ENTITLED TO ACCUMULATE TWENTY PER CENT OF RS. 2,57,376, AS IT CONTENDS, OR TWENTY THE REVENUE APPEARED TO CONTEND SECTION 11(1)(A) READS THUS : '11. INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES. INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH AND, WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF TWENTY 4. HAVING REGARD TO THE PLAIN LANGUAGE OF THE ABOVE PROVISION, IT IS CLEAR THAT A CHARITABLE OR RELIGIOUS TRUST IS ENTITLED TO ACCUMULATE TWENTY INCOME DERIVED FROM PROPERTY HELD UNDER TRUST. FOR THE PRESENT PURPOSES, THE DONATIONS, THE ASSESSEE RECEIVED, IN THE SUM OF RS. 2,57,376, WOULD CONSTITUTE ITS PROPERTY AND IT IS ENTITLED TO ACCUMULATE TWENTY UNCLEAR ON WHAT BASIS THE REVENUE CONTENDED THAT IT WAS ENTITLED TO ACCUMULATE ONLY TWENTY- FIVE PER CENT OF 5. FOR THE AFORESAID REASONS, THE CIVIL APPEAL IS DISMISSED. 6. NO ORDER AS TO COSTS. 3 ITA NO. 499/KOL/2019; M/S. CALCUTTA CRICKET & FOOTBALL CLUB WE MAY ALSO AT THIS STAGE MENTION THAT THE KERALA HIGH COURT IN H.H. MARTHANDA VARMA ELAYARAJA OF TRAVANCORE TRUST'S CASE (SUPRA ), THE MADHYA PRADESH HIGH COUR IN MOHANLAL HARGOVINDDAS PUBLIC CHARITABLE TRUST'S CASE (SUPRA) , THE BOMBAY HIGH COURT IN TRUSTEES OF BHAT FAMILY RESEARCH FOUNDATION'S CASE (SUPRA) AND THE MADRAS HIGH COURT IN C.M. KOTHARI CHARITABLE TRUST'S CASE (SUPRA) HAVE TAKEN THE SAME VIEW AS E KARNATAKA HIGH COURT IN THE PRESENT CASE. WE APPROVE THE VIEW TAKEN IN THE AFORESAID DECISIONS. WE ALSO APPROVE THE SIMILAR VIEW TAKEN BY THE JAMMU & KASHMIR HIGH COURT IN SHRI KRISHEN CHAND CHARITABLE TRUST'S CASE (SUPRA) . THE LEARNED COUNSEL EVENUE, THEREFORE, HAS MADE OUT NO CASE FOR OUR INTERFERENCE WITH THE DECISION RENDERED BY THE DIVISION BENCH OF THE KARNATAKA HIGH COURT. IN THE ABOVE CASE, THE HONBLE SUPREME COURT HAS BY WAY OF ILLUSTRATION LAID OF RS.1 LAKH, I.E., THE INCOME BEFORE DEDUCTING APPLICATION OF INCOME OF , SHOULD BE ALLOWED FOR ACCUMULATION OR SET ASIDE U/S 11(1)(A) OF THE ACT CIT V. PROGRAMME FOR COMMUNITY ORGANISATION [2001] 248 ITR 1/ 116 WHEREIN, IT WAS HELD AS FOLLOWS:- THE QUESTION THAT REALLY REQUIRES CONSIDERATION IS WHETHER, FOR THE PURPOSES OF SECTION 11(1)(A) OF THE INCOME - TAX ACT, 1961 ('THE ACT'), THE AMOUNT FOR THE GRANT OF EXEMPTION OF TWENTY - FIVE PER CENT SHOULD BE THE INCOME OF THE TRUST OR IT SHOULD OTAL INCOME DETERMINED FOR THE PURPOSES OF ASSESSMENT TO INCOME QUESTION HAS TO BE ANSWERED IN THE LIGHT OF THESE FACTS: THE ASSESSEE DONATIONS IN THE AGGREGATE SUM OF RS. 2,57,376. IT APPLIED THEREOUT FOR ITS CHARITABLE PURPOSES T HE AGGREGATE SUM OF RS. 1,70,369 LEAVING A BALANCE OF RS. 87,010. THE QUESTION IS WHETHER THE ASSESSEE IS ENTITLED TO ACCUMULATE TWENTY PER CENT OF RS. 2,57,376, AS IT CONTENDS, OR TWENTY - FIVE PER CENT OF RS. 87,010, AS THE REVENUE APPEARED TO CONTEND . SECTION 11(1)(A) READS THUS : '11. INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES. INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF TWENTY - FIVE PER CENT OF THE INCOME FROM SUCH PROPERTY;' HAVING REGARD TO THE PLAIN LANGUAGE OF THE ABOVE PROVISION, IT IS CLEAR THAT A CHARITABLE OR RELIGIOUS TRUST IS ENTITLED TO ACCUMULATE TWENTY - FIVE PER CENT OF ITS INCOME DERIVED FROM PROPERTY HELD UNDER TRUST. FOR THE PRESENT PURPOSES, THE ASSESSEE RECEIVED, IN THE SUM OF RS. 2,57,376, WOULD CONSTITUTE ITS PROPERTY AND IT IS ENTITLED TO ACCUMULATE TWENTY - FIVE PER CENT THEREOUT. IT IS UNCLEAR ON WHAT BASIS THE REVENUE CONTENDED THAT IT WAS ENTITLED TO ACCUMULATE FIVE PER CENT OF RS. 87,010. FOR THE AFORESAID REASONS, THE CIVIL APPEAL IS DISMISSED. NO ORDER AS TO COSTS. M/S. CALCUTTA CRICKET & FOOTBALL CLUB WE MAY ALSO AT THIS STAGE MENTION THAT THE KERALA HIGH COURT IN H.H. MARTHANDA VARMA ELAYARAJA OF TRAVANCORE TRUST'S CASE (SUPRA ), THE MADHYA PRADESH HIGH COUR T IN MOHANLAL HARGOVINDDAS PUBLIC CHARITABLE TRUST'S CASE (SUPRA) , THE BOMBAY HIGH COURT IN TRUSTEES OF BHAT FAMILY RESEARCH FOUNDATION'S CASE (SUPRA) AND THE MADRAS HIGH COURT IN C.M. KOTHARI CHARITABLE TRUST'S CASE (SUPRA) HAVE TAKEN THE SAME VIEW AS E KARNATAKA HIGH COURT IN THE PRESENT CASE. WE APPROVE THE VIEW TAKEN IN THE AFORESAID DECISIONS. WE ALSO APPROVE THE SIMILAR VIEW TAKEN BY THE JAMMU & KASHMIR HIGH COURT IN SHRI KRISHEN CHAND CHARITABLE TRUST'S CASE (SUPRA) . THE LEARNED COUNSEL EVENUE, THEREFORE, HAS MADE OUT NO CASE FOR OUR INTERFERENCE WITH THE DECISION IN THE ABOVE CASE, THE HONBLE SUPREME COURT HAS BY WAY OF ILLUSTRATION LAID THE INCOME BEFORE DEDUCTING APPLICATION OF INCOME OF , SHOULD BE ALLOWED FOR ACCUMULATION OR SET ASIDE U/S 11(1)(A) OF THE ACT . [2001] 248 ITR 1/ 116 THE QUESTION THAT REALLY REQUIRES CONSIDERATION IS WHETHER, FOR THE PURPOSES OF TAX ACT, 1961 ('THE ACT'), THE AMOUNT FOR THE GRANT FIVE PER CENT SHOULD BE THE INCOME OF THE TRUST OR IT SHOULD OTAL INCOME DETERMINED FOR THE PURPOSES OF ASSESSMENT TO INCOME -TAX. THIS QUESTION HAS TO BE ANSWERED IN THE LIGHT OF THESE FACTS: THE ASSESSEE -TRUST RECEIVED DONATIONS IN THE AGGREGATE SUM OF RS. 2,57,376. IT APPLIED THEREOUT FOR ITS HE AGGREGATE SUM OF RS. 1,70,369 LEAVING A BALANCE OF RS. 87,010. THE QUESTION IS WHETHER THE ASSESSEE IS ENTITLED TO ACCUMULATE TWENTY -FIVE FIVE PER CENT OF RS. 87,010, AS '11. INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES. (1)(A ) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART FIVE PER CENT OF THE INCOME FROM SUCH PROPERTY;' HAVING REGARD TO THE PLAIN LANGUAGE OF THE ABOVE PROVISION, IT IS CLEAR THAT A FIVE PER CENT OF ITS INCOME DERIVED FROM PROPERTY HELD UNDER TRUST. FOR THE PRESENT PURPOSES, THE ASSESSEE RECEIVED, IN THE SUM OF RS. 2,57,376, WOULD CONSTITUTE ITS FIVE PER CENT THEREOUT. IT IS UNCLEAR ON WHAT BASIS THE REVENUE CONTENDED THAT IT WAS ENTITLED TO ACCUMULATE 6.2. IN THE ABOVE JUDGMENT ALSO, THE HONBLE SUPREME COURT HAS HELD THAT U/S 11(1)(A) OF THE ACT, 25% OF THE AGGREGATE SUM OF RS.2,57,376/ SET APART AND NOT 25% OF RS.87,010/ APPLICATION OF INCOME . THE HONBLE JURISDICTIONAL HIGH COURT HAS IN THE CASE OF COMMISSIONER OF INCOME- TAX VS BIRLA JANAHIT LAID DOWN BY THE HONBLE SUPREME COURT. 7. RESPECTFULLY FOLLOWING THE JUDGMENTS, WE HOLD THAT THE ASSESSEE IS ENTITLED INCOME PRIOR TO DEDUCTION OF EXPENDITURE OF THE ACT. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE SD/- [ SANJAY GARG] JUDICIAL MEMBER DATED : 05.02.2021 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/ S. CALCUTTA CRICKET & FOOTBALL 10B, MIDDLETON ROW KOLKATA 700 071 2. INCOME TAX OFFICER, EXEMPTION 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 4 ITA NO. 499/KOL/2019; M/S. CALCUTTA CRICKET & FOOTBALL CLUB IN THE ABOVE JUDGMENT ALSO, THE HONBLE SUPREME COURT HAS HELD THAT U/S 11(1)(A) OF THE ACT, 25% OF THE AGGREGATE SUM OF RS.2,57,376/ - MAY BE ACCUMULATE SET APART AND NOT 25% OF RS.87,010/ - WHICH WAS ON THE NET FIGURE AFTER DEDUCTING THE . THE HONBLE JURISDICTIONAL HIGH COURT HAS IN THE CASE OF TAX VS BIRLA JANAHIT (SUPRA), FOLLOWED THESE PROPOSITIONS OF LA LAID DOWN BY THE HONBLE SUPREME COURT. RESPECTFULLY FOLLOWING THE JUDGMENTS OF THE HONBLE SUPREME COURT IN THE ABOVE JUDGMENTS, WE HOLD THAT THE ASSESSEE IS ENTITLED TO ACCUMULATE OR SET ASIDE INCOME PRIOR TO DEDUCTION OF EXPENDITURE WHICH WAS APPLICATION OF INCOME, IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 5 TH DAY OF FEBRUARY, 2021. [ J. SUDHAKAR REDDY ACCOUNTANT MEMBER S. CALCUTTA CRICKET & FOOTBALL CLUB INCOME TAX OFFICER, EXEMPTION WARD(1), KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES M/S. CALCUTTA CRICKET & FOOTBALL CLUB IN THE ABOVE JUDGMENT ALSO, THE HONBLE SUPREME COURT HAS HELD THAT U/S MAY BE ACCUMULATE D OR WHICH WAS ON THE NET FIGURE AFTER DEDUCTING THE . THE HONBLE JURISDICTIONAL HIGH COURT HAS IN THE CASE OF FOLLOWED THESE PROPOSITIONS OF LA W OF THE HONBLE SUPREME COURT IN THE ABOVE TO ACCUMULATE OR SET ASIDE OF 15% OF THE WHICH WAS APPLICATION OF INCOME, U/S 11(1)(A) SD/- J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES 5 ITA NO. 499/KOL/2019; M/S. CALCUTTA CRICKET & FOOTBALL CLUB M/S. CALCUTTA CRICKET & FOOTBALL CLUB
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