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Excess of expenditure over trust’s income for a previous year can be claimed as income applied in subsequent previous year
Case Law Details
- Case Name
- Deputy Director of Income-tax Vs Karnataka Food and Civil Supplies Ltd (ITAT Bangalore)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2010-11
- Courts
- All ITAT, ITAT Bangalore
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Brief of the case:
• The ITAT Bangalore in the case of DCIT Vs. Karnataka Food and Civil Supplies Ltd. held that the excess expenditure incurred in earlier previous years can be set off against the income of trust for the current year as an application of income because Section 11(1)(a) does not contain any words of limitation to the effect that the income should have been applied for charitable purpose only in the year in which the income has arisen.
• As such the income of earlier previous years can also be shown as applied in the current previous year to the extent of excess of expendit...
Author Info
HI,
In essence the income of the Charitable Institutions is taxed on cash basis.What is the source for the additional expenditure?Is it out of loans? If so whether the loan repayment is claimed as an expenditure? These are some of the lingering issues which need adjudication if already not decided.