Case Law Details
Church’s Auxiliary For Social Action Vs ACIT (ITAT Delhi)
In the case of India Brand Equity Foundation vs. Assistant Commissioner of Income Tax (E), Trust, Ward-II, New Delhi [(2012) 23 com 323 (Del)] it was held that amount spent outside India for participating in a fare held outside India cannot be treated as application of income of trust for purpose of section 11(1 )(a). The Hon’ble ITAT observed that if the income of the trust can be applied even outside India so long as the charitable purposes are in India, then there is no need for the trust which tends to promote international welfare in which India is interested and which was created after 04/01/1952 to apply to the CBDT for a general or special order directing dial the income to the extent to which it is applied to the promotion of international welfare outside India shall not be denied the exemption nor would it be necessary for a charitable or religious trust created before the aforesaid date to seek such a order from CBDT in respect of its income which is applied to charitable or religious purposes outside India. It was further held that the words “in India” appearing in section 11(1)(a) and the words “outside India” appearing in section 11(1)(c) qualified the word “applied” appearing in these provisions and not the words “said purposes.”
Thus, it is well settled law that the expenditure incurred by the trust outside India cannot be considered as application of income as per Section 11(1)(a) of the Act. Therefore in the present case, the disallowance of Rs. 10,15,818/- which was spent outside India on account of boarding and lodging local transport etc. cannot be considered as application income as per Section 11(1)(a) of the Act.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the assessee for assessment year 2014-15 against the order of the Ld. Commissioner of Income Tax (Appeals)–40, New Delhi, dated 02.04.2018.
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