DCIT, Exemption- Circle, Ghaziabad V. Aligarh Development Authority (ADA) , Aligarh

ITA 7806/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5881 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 28-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Opportunity of being heard; Diversion of income; Capital receipt; Set aside
• Section: 12AA; 250; 12; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: A NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.7806/DEL/2017 ASSESSMENT YEAR: 2014-15 DCIT, EXEMPTION CIRCLE, GHAZIABAD VS. ALIGARH DEVELOPMENT AUTHORITY (ADA), RAMGHAT ROAD, ALIGARH UP PAN: AAALA0082G (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDE R DATED 06/09/2017 PASSED BY THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS)-ALIGARH [IN SHORT THE LD. CIT(A)] FOR A SSESSMENT YEAR 2014-15 RAISING FOLLOWING GROUNDS: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND FACTS IN DELETING ADDITION IN RESPECT IF SURPLUS OF RS.6,35,39,809/- MADE BY THE AO. 2. THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRE D IN LAW AND FACTS IN DELETING ADDITION MADE BY THE AO I N RESPECT OF SUM OF RS. 23,36,84,304/- RECEIVED TOWARDS INFRASTRUCTU RE DEVELOPMENT APPELLANT BY SH. ASHOK GAUTAM, SR. DR RESPONDENT BY SH. DEEPAK SINGH, ADVOCATE DATE OF HEARING 23.03.2021 DATE OF PRONOUNCEMENT 27.04.2021 2 ITA NO. 7806/DEL/2017 FUND DIRECTLY CREDITED TO THE FUND ACCOUNT WITHOUT CREDITING THE SAME TOWARDS INCOME. 3. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN DE LETING DISALLOWANCE OF RS.10,34,026/- CLAIMED AS DEPRECIAT ION BY THE ASSESSEE. 4. THE ORDER OF LD. CITA() BE CANCELLED AND THE OR DER OF THE AO BE RESTORED. 2. THE REVENUE HAS ALSO PREFERRED FOLLOWING ADDITIONA L GROUND OF APPEAL: THE LD. COMMISSIONER OF INCOME TAX (APPEAL) HAS ER RED IN LAW AND ON FACTS BY ALLOWING THE BENEFIT OF SECTION 11 TO T HE ASSESSEE IGNORING THE FACTS THAT THE ASSESSEE IS ENGAGED IN ACTIVITY IN NATURE OF TRADE, COMMERCE OR BUSINESS. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE BEING A DEVELOPMENT AUTHORITY, FILED ITS RETURN OF INCOME F OR THE YEAR UNDER CONSIDERATION ON 29/09/2014, DECLARING NIL IN COME. IN THE RETURN OF INCOME, PROFIT (SURPLUS) DECLARED OF 6,35,39,809/- WAS CLAIMED AS EXEMPT UNDER THE PROVISIONS OF SECTIONS 11 AND 12 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). IN T HE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER EXAMI NED, THE ACTIVITY OF THE ASSESSEE AND CONCLUDED THAT ITS ACT IVITIES ARE IN THE NATURE OF TRADE, COMMERCE OR BUSINESS IN VIEW OF TH E DOMINANT ACTIVITY OF ACQUISITION AND SALE OF IMMOVABLE PROPE RTIES. THE ASSESSING OFFICER ALSO OBSERVED THAT ACTIVITY OF TH E AUTHORITY WERE BEING CARRIED OUT WITH THE MOTIVE FOR PROFIT AND TH US THE ASSESSEE WAS NOT ENTITLED FOR EXEMPTION UNDER SECTION 11 OF THE ACT. HE, ACCORDINGLY, ASSESSED THE SURPLUS OF 6,35,39,809/- AS INCOME FROM BUSINESS. FURTHER, HE ALSO OBSERVED THAT 23,36,84,304/- 3 ITA NO. 7806/DEL/2017 RECEIVED FOR INFRASTRUCTURE FUND, WAS DIRECTLY CR EDITED TO A SEPARATE ACCOUNT OF FUND, WITHOUT CREDITING THE SAM E TOWARDS INCOME OF THE ASSESSEE. THEREFORE, THE ASSESSING OF FICER ALSO ADDED THIS AMOUNT TO THE TOTAL INCOME. FURTHER, THE ASSESSING OFFICER ALSO MADE ADDITION OF 10,34,026/- BY WAY OF MAKING DISALLOWANCE FOR DEPRECIATION. 3.1 AGGRIEVED WITH THE ADDITION/DISALLOWANCES MADE, TH E ASSESSEE FILED APPEAL BEFORE THE LEARNED CIT(A) WH O ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE FINDING OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL (IN SHORT THE TRIBUNAL) RAISING THE GROU NDS AND ADDITIONAL GROUND AS REPRODUCED ABOVE. 4. BEFORE US, THE PARTIES APPEARED THROUGH VIDEO CONF ERENCING FACILITY AND THE LEARNED COUNSEL OF THE ASSESSEE FI LED A PAPER- BOOK. 5. THE LEARNED DR RELIED ON THE ORDER OF THE ASSESSIN G OFFICER AND SUBMITTED THAT ORDER OF THE TRIBUNAL IN THE CAS E OF KHURJA DEVELOPMENT AUTHORITY (ITA NO.4290 AND 4291/DEL/201 4 AND 5103/DEL/2016 MIGHT BE FOLLOWED. 6. ON THE CONTRARY, LEARNED COUNSEL OF THE ASSESSEE S UBMITTED THAT FINDING OF THE LD. CIT(A) MIGHT BE UPHELD AS H E HAS FOLLOWED ORDERS OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF. 7. WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON T HE ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON REC ORD. AS FAR AS THE ADDITIONAL GROUND AND GROUND NO. 1 OF THE APPEA L ARE CONCERNED, THE FINDING OF THE LEARNED CIT(A) ARE RE PRODUCED AS UNDER: 4 ITA NO. 7806/DEL/2017 5.2 THESE GROUNDS RELATE TO THE ISSUE OF HOLDING T HE ACTIVITIES OF THE APPELLANT AUTHORITY AS CHARITABLE OR OTHERWISE. SIMILAR ISSUE WAS RAISED IN THE APPEAL FOR A.Y.2012-13 WHICH WAS DECIDED BY ME VIDE ORDER PASSED U/S. 250 ON 01.03.2017 IN APPEAL NO.09/2015- 16/ ALIGARH AS UNDER :- THESE GROUNDS RELATE TO THE AOS DECISION OF NOT H OLDING THE APPELLANTS ACTIVITIES AS ACTIVITIES TOWARDS CHARIT ABLE PURPOSES. THE AO HAS RELIED UPON THE DECISION OF HONBLE ITAT AMR ITSAR BENCH IN THE CASE OF M/S JALANDHAR DEVELOPMENT AUTHORITY (SU PRA). ON THE OTHER HAND, THE APPELLANT HAS RELIED UPON THE DECIS ION OF JURISDICTIONAL ALLAHABAD HIGH COURT IN THE CASE OF CIT V/S LUCKNOW DEVELOPMENT AUTHORITY (2014) 265 CTR (ALL) 0433. IN THE LDA CASE, THE AO WHILE PASSING THE ASSESSMENT ORDER U/S 143(3 ) OBSERVED THAT THE ASSESSEE WAS NOT ELIGIBLE FOR THE BENEFIT OF SECTION 11 OF THE ACT AND ASSESSED THE ENTIRE INCOME AS BUSINESS INCO ME. HOWEVER, THIS FINDING WAS REJECTED BY HONBLE ALLAHABAD HIGH COURT AND THE ACTIVITIES OF THE DEVELOPMENT AUTHORITIES WERE HELD TO BE CHARITABLE IN NATURE. THIS RULING OF HONBLE ALLAHABAD HIGH COURT WAS FOLLOWED BY THE SAME HIGH COURT IN INCOME TAX APPEAL NO. 657 OF 2007 IN THE CASE OF HAPUR PILKHWA DEVELOPMENT AUTHORITY AND OTH ER AUTHORITIES. INCIDENTALLY, THE APPELLANT WAS ALSO ONE OF THE AUT HORITIES FOR WHICH THE SAID ORDER HAS BEEN PASSED. RELYING UPON THE AF ORESAID DECISION IN THE CASE OF LDA, THE HONBLE COURT HELD THAT THE ACTIVITIES OF THE DEVELOPING AUTHORITIES ARE OF CHARITABLE NATURE AND THE AUTHORITY IS ELIGIBLE TO BE REGISTERED U/S 12AA. AS THE HONBLE ALLAHABAD HIGH COURT UPHELD THE TRIBUNALS DECISION OF ALLOWING RE GISTRATION U/S 12AA FOR THE APPELLANT AUTHORITY, NO QUESTION CAN B E RAISED TO DOUBT THE CHARITABLE CHARACTER OF THE ACTIVITIES WHICH TH E AUTHORITY HAS UNDERTAKEN. SINCE THE APPELLANT ENJOYS BENEFIT OF R EGISTRATION U/S 12AA, IT CAN BE PRESUMED THAT THE OBJECTS OF THE AP PELLANT ARE OF CHARITABLE CHARACTER. IN VIEW OF THE ABOVE, AS THE ACTIVITIES IN THE RELE VANT PREVIOUS YEAR ARE SIMILAR TO THE ACTIVITIES UNDERTAKEN DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2012-13, IT IS PRUDENT TO HOLD THA T THE APPELLANT IS ENGAGED IN THE ACTIVITIES WHICH ARE OF CHARITABLE N ATURE. THEREFORE, THE APPELLANT WOULD BE ENTITLED TO GET THE BENEFIT OF REGISTRATION U/S 12AA. AS SUCH, IN THE ASSESSMENT, THE ASSESSING OFF ICERS ONLY IS TO SEE WHETHER THE ACTUAL ACTIVITIES UNDERTAKEN DURING THE YEAR ARE IN ACCORDANCE WITH THE OBJECTS WITH REGARD TO WHICH TH E AUTHORITY WAS GRANTED REGISTRATION U/S. 12 AA. THERE IS NO FINDI NG IN THE ASSESSMENT ORDER THAT THE APPELLANT AUTHORITY HAS D EVIATED FROM ITS CHARITABLE OBJECTS DURING THE COURSE OF THE ACTIVIT IES PERFORMED DURING THE RELEVANT PREVIOUS YEAR. SINCE THE APPEL LANT IS REGISTERED U/S. 12 AA, IT IS AUTOMATICALLY ENTITLED FOR EXEMPT ION U/S. 11 IF OTHER CONDITIONS ARE FULFILLED. SINCE THE APPELLANTS AP PLICATION OF INCOME PLUS ACCUMULATION OF INCOME FOR CHARITABLE PURPOSES IS MORE THAN THE 85% OF THE TOTAL INCOME, THE WHOLE INCOME WOULD GET EXEMPTED U/S. 5 ITA NO. 7806/DEL/2017 11. THUS, THE INCOME WOULD HAVE TO BE ASSESSED AT NIL AS CLAIMED IN THE RETURN OF INCOME. IN LIGHT OF THE OBSERVATIONS AS NARRATED ABOVE, TH ESE GROUNDS ARE BEING ALLOWED. 7.1 WE FIND THAT LD. CIT(A) HAS FOLLOWED THE FINDING O F THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF TH E ASSESSEE IN EARLIER YEAR AND HELD THAT THE ACTIVITY OF AUTHORIT Y OF DEVELOPING OF LAND ETC. ARE CHARITABLE IN NATURE AND ELIGIBLE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. THE LD. CIT(A) HAS A CCORDINGLY FOUND THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 11 OF THE ACT IN ORDER AND ALSO OBSERVED THAT ASSESSEE HA S APPLIED MORE THAN 85% OF THE TOTAL INCOME TOWARDS CHARITABLE PUR POSES. THE REGISTRATION GRANTED BY THE CIT UNDER SECTION 12AA OF ACT IS VALIDLY IN OPERATION IN THE RELEVANT YEAR AND NOT W ITHDRAWN. THUS, THE ASSESSEE WAS ENTITLED FOR EXEMPTION UNDER SECTI ON 11 SUBJECT TO FULFILLING THE CONDITIONS CONTAINED THEREIN. IN VIEW OF BINDING PRECEDENT FOLLOWED BY THE LEARNED CIT(A), WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(A) ON THE ISSUE IN DISPUTE AND ACCORDINGLY WE UPHOLD THE SAME. THE ADDITIONAL GROU ND AND GROUND NO. 1 OF THE APPEAL OF THE REVENUE ARE ACCOR DINGLY DISMISSED. 8. AS FAR AS GROUND NO. 2 OF THE APPEAL IS CONCERNED, THE LD. CIT(A) HAS OBSERVED AS UNDER: THE AO HAS ALLEGED THAT AN AMOUNT OF RS. 23,36,84, 304/- HAS BEEN TRANSFERRED DIRECTLY TO INFRASTRUCTURE DEVELOPMENT FUNDS AND HAS NOT BEEN ROUTED THROUGH THE INCOME AND EXPENDITURE ACCO UNT. FOR THIS REASON, SEPARATE ADDITION OF THE SAME AMOUNT WAS MA DE. IN THIS REGARD, THE APPELLANT HAS SUBMITTED THAT AS PER GOV ERNMENT ORDER, THE APPELLANT SOCIETY HAS TO TRANSFER THE MAJOR PER CENTAGE OF RECEIPTS UNDER VARIOUS HEADS TO INFRASTRUCTURE DEVELOPMENT F UND AND IT HAS NO DISCRETION TO SPEND ANY PART OF THE SAID FUND ON ITS OWN. THE EXPENDITURE FROM THE SAID FUND IS SUPERVISED BY A C OMMITTEE 6 ITA NO. 7806/DEL/2017 NOMINATED BY THE STATE GOVERNMENT. IT HAS BEEN EXPL AINED THAT THIS INCOME FALLS UNDER DIVERSION OF INCOME BY OVERRID ING TITLE AND IS NOT INCLUDIBLE IN THE TOTAL INCOME. IN MY OPINION, SINCE THE APPELLANT IS ENTITLED FOR EXEMPTION U/S 11, THE ONLY RELEVANT POINT IS THAT 85% OF THE TOTAL INCOME SHOULD BE UTILIZED TOWARDS CHAR ITABLE OBJECTS. TOTAL INCOME DURING THE YEAR INCLUDING THE INCOME R ECEIVED TOWARDS INFRASTRUCTURE DEVELOPMENT FUND IS RS. 33,37,97,968 /- OUT OF WHICH RS. 12,95,28,302/- HAS BEEN UTILIZED DURING THE REL EVANT PREVIOUS YEAR. IN ACCORDANCE WITH THE PROVISIONS OF SECTION 11, 85% OF THE TOTAL RECEIPTS I.E. RS. 28,37,28,272/- SHOULD HAVE BEEN UTILIZED DURING THE YEAR. THUS, THERE IS A SHORTFALL OF RS. 15,41,99,970/-. THE APPELLANT HAS PRODUCED A COPY OF FORM-10 FILED ON 3 0.09.2014 WHICH SHOWS THAT AN AMOUNT OF RS. 15,41,99,970/- HAS BEEN REQUESTED TO BE CARRIED FORWARD FOR UTILIZATION IN SUBSEQUENT YE ARS. THUS, ALL THE REQUIREMENTS FOR CLAIMING EXEMPTION U/S 11 HAVE BEE N FULFILLED. 'ALSO, IT IS OBSERVED THAT THE INCOME RECEIVED TOWA RDS THE INFRASTRUCTURE DEVELOPMENT FUND HAS BEEN CONSIDERED FOR WORKING OUT THE UTILIZATION U/S 11. HENCE, THE AOS CONCLUS ION THAT THE INCOME RECEIVED UNDER INFRASTRUCTURE DEVELOPMENT FU ND HAS NOT BEEN CONSIDERED IS WITHOUT ANY BASIS. IN VIEW OF THE ABOVE, THERE IS NO JUSTIFICATION FOR MAKING ANY SEPARATE ADDITION FOR THE AMOUNT RECEIVED TOWARDS I NFRASTRUCTURE DEVELOPMENT FUND AND THE AO IS BEING DIRECTED ACCOR DINGLY. THESE GROUNDS ARE THEREFORE ALLOWED. 8.1 THE CLAIM OF THE REVENUE IS THAT AMOUNT OF 23,36,84,304/- HAS NOT BEEN CONSIDERED FOR APPLICATION OF FUNDS AN D THEREFORE THIS ISSUE MIGHT BE RESTORED BACK TO THE FILE OF TH E ASSESSING OFFICER AS DECIDED IN THE CASE OF KHURJA DEVELOPMEN T AUTHORITY (SUPRA). THE TRIBUNAL IN THE CASE OF KHURJA DEVELOP MENT AUTHORITY (SUPRA) RESTORED THIS ISSUE TO THE AO WIT H FOLLOWING OBSERVATIONS: 15. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE AR E OF THE VIEW THAT THIS ISSUE ALSO REQUIRES RECONSIDERATION AT THE LEV EL OF THE AO. THE ASSESSEE HAS NOW BEEN GRANTED REGISTRATION U/S 12AA OF THE ACT AND THUS, ASSESSEE IS ENTITLED FOR EXEMPTION FROM I NCOME U/S 11 OF THE ACT AS PER LAW. EVEN IF THE INFRASTRUCTURE RESE RVE FUND ITA NOS. 4290, 4291/DEL/2014 & 5103/DEL/2016 MAYBE TREATED A S INCOME OF ASSESSEE, IT WILL HAVE TO BE EXAMINED, WHETHER, - ASSESSEE IS ENTITLED FOR EXEMPTION U/S 11 OF THE ACT ON THE SAM E INCOME. THEREFORE, IT WOULD DEPEND UPON FUNDINGS WITH REGAR D TO EXEMPTION U/S 11 OF THE ACT. WE HAVE ALREADY RESTORED THE ISS UE OF EXEMPTION 7 ITA NO. 7806/DEL/2017 U/S 11 OF THE ACT TO THE AO FOR FRESH DECISION AS P ER LAW. FURTHER, THE AUTHORITIES BELOW HAVE NOT. APPRECIATED THE FAC T THAT ASSESSEE CLAIMED THAT INFRASTRUCTURE FUND WAS RECEIVED FOR D EVELOPMENT ACTIVITIES FROM THE STATE AUTHORITIES, THE ASSESSEE HAS TO SPEND THE AMOUNT ON THE SAME AS PER APPROVAL OF THE STATE AUT HORITIES. THUS, THERE MAY NOT BE ANY PROFIT ELEMENT OUT OF THE SAME SOURCES. IT MAY ALSO BE NOTED HERE THAT WHATEVER AMOUNT HAS BEEN SP ENT BY ASSESSEE ON THE SAME ISSUE, THE AO HAS ACCEPTED THA T ASSESSEE SPENT THE SAME AMOUNT AS PER THE DIRECTIONS OF THE STATE AUTHORITIES. THEN IN THAT EVENT IT IS DIFFICULT TO BELIEVE THAT PART AMOUNT IS CAPITAL RECEIPT AND PART WOULD BE REVENUE IN NATURE. THEREF ORE, THERE WAS NO JUSTIFICATION FOR LD. CIT(A) TO HOLD THAT THE IM PUGNED RECEIPT IS REVENUE IN NATURE. THIS ISSUE ALSO REQUIRES RECONSI DERATION IN VIEW OF THE FACT THAT ASSESSEE IS ENTITLED FOR EXEMPTION U/S 11 OF THE ACT. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHOR ITIES BELOW ON THE ISSUE OF INFRASTRUCTURE FUND AS WELL AND RESTORE TH E ISSUE TO THE FILE OF AO WITH DIRECTION TO REDECIDE THE ISSUE AS PER L AW BY GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 8.2 HOWEVER, WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE PROVISIONS OF THE ACT AND RULES, 1962 (IN SHORT TH E RULES). ACCORDING TO THE PROVISIONS OF THE ACT, EXEMPTION U NDER SECTION 11 IS ALLOWED, IF 85% OF THE FUNDS RECEIVED ARE APP LIED FOR CHARITABLE PURPOSES IN THE YEAR UNDER CONSIDERATION AND, IF THERE IS ANY SHORT FALL IN APPLICATION OF SUCH FUNDS, THE ASSESSEE HAS TO FOLLOW THE PROCEDURE PRESCRIBED FOR GETTING BENEFIT OF SECTION 11 OF THE ACT. THE RELEVANT EXPLANATION-1 BELOW SECTION 1 1(1)(D) IS REPRODUCED AS UNDER: INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGI OUS PURPOSES. 11. (1) EXPLANATION 1.FOR THE PURPOSES OF CLAUSES (A) AND (B), (1) IN COMPUTING THE FIFTEEN PER CENT OF THE INCOM E WHICH MAY BE ACCUMULATED OR SET APART, ANY SUCH VOLUNTARY CONTRI BUTIONS AS ARE REFERRED TO IN SECTION 12 SHALL BE DEEMED TO BE PART OF THE INCOME; (2) IF, IN THE PREVIOUS YEAR, THE INCOME APPLIED T O CHARITABLE OR RELIGIOUS PURPOSES IN INDIA FALLS SHORT OF EIGHTY-FIVE PER CE NT OF THE INCOME DERIVED DURING THAT YEAR FROM PROPERTY HELD UNDER TRUST, OR , AS THE CASE MAY BE, HELD UNDER TRUST IN PART, BY ANY AMOUNT 8 ITA NO. 7806/DEL/2017 (I) FOR THE REASON THAT THE WHOLE OR ANY PART OF THE INCOME HAS NOT BEEN RECEIVED DURING THAT YEAR, OR (II) FOR ANY OTHER REASON, THEN (A) IN THE CASE REFERRED TO IN SUB-CLAUSE (I), SO MUCH OF THE INCOME APPLIED TO SUCH PURPOSES IN INDIA DURING THE PREVIO US YEAR IN WHICH THE INCOME IS RECEIVED OR DURING THE PREVIOUS YEAR IMMEDIATELY FOLLOWING AS DOES NOT EXCEED THE SAID AMOUNT, AND (B) IN THE CASE REFERRED TO IN SUB-CLAUSE (II), S O MUCH OF THE INCOME APPLIED TO SUCH PURPOSES IN INDIA DURING THE PREVIOUS YEAR IMMEDIATELY FOLLOWING THE PREVIOUS YEAR IN WHICH THE INCOME WAS DERIVED AS DOES NOT EXCEED THE SAID AMOUNT, MAY, AT THE OPTION OF THE PERSON IN RECEIPT OF THE IN COME (SUCH OPTION TO BE EXERCISED BEFORE THE EXPIRY OF THE TIME ALLOWED UNDER SUB-SECTION (1) OF SECTION 139 FOR FURNISHING THE RETURN OF INCOME, IN SUCH FORM AND MANNER AS MAY BE PRESCRIBED) BE DEEMED TO BE INCOME APPLIED TO SUCH PURPOSES DURING THE PREVIOUS YEAR IN WHICH THE INCOME WAS DERIVED; AND THE INCOME SO DEEMED TO HAV E BEEN APPLIED SHALL NOT BE TAKEN INTO ACCOUNT IN CALCULATING THE AMOUNT OF INCOME APPLIED TO SUCH PURPOSES, IN THE CASE REFERRED TO I N SUB-CLAUSE (I), DURING THE PREVIOUS YEAR IN WHICH THE INCOME IS RECEIVED O R DURING THE PREVIOUS YEAR IMMEDIATELY FOLLOWING, AS THE CASE MAY BE, AND , IN THE CASE REFERRED TO IN SUB-CLAUSE (II), DURING THE PREVIOUS YEAR IMM EDIATELY FOLLOWING THE PREVIOUS YEAR IN WHICH THE INCOME WAS DERIVED. 8.3 THE LD. CIT(A) HAS NOTED THAT THE ASSESSEE HAD PRO DUCED BEFORE HIM PRESCRIBED FORM AS LAID DOWN IN THE RULE S, WITH THE REQUEST FOR CARRY FORWARD OF THE AMOUNT FOR UTILIZA TION IN SUBSEQUENT YEARS AND, THUS, HAS FULFILLED THE REQUI REMENT AS PRESCRIBED IN EXPLANATION I TO SECTION 11 OF THE A CT. BEFORE US, THE LEARNED DR FAILED TO CONTROVERT THIS FINDING OF THE LEARNED CIT(A). IN OUR OPINION, IN THE INSTANT CASE BEFORE US, THE ASSESSEE HAS FULFILLED THE REQUIREMENT OF LAW AND WE DO NOT FIND ANY REASON FOR RESTORING THE MATTER TO THE ASSESSING OFFICER. WE DO NOT FIND ANY ERROR IN FINDING OF THE LEARNED CIT(A) ON THE I SSUE IN DISPUTE 9 ITA NO. 7806/DEL/2017 AND ACCORDINGLY WE UPHOLD THE SAME. THE GROUND NO.2 OF THE APPEAL OF THE REVENUE IS ALSO DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH APRIL, 2021 SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27.04.2021 RK/- (D.T.D.S.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI