Indian Kanoon - Search engine for Indian Law

11. We are, therefore, of the opinion that the adjustment of the expenses incurred by the trust for charitable and religious purposes in the earlier year against the income earned by the trust in the subsequent year would amount to applying the income of the trust for charitable and religious purposes in the subsequent year in which such adjustment has been made and will have to be excluded from the income of the trust under Section 11(1)(a) of the Act.

12. In the present case, it has not been found by the Appellate Assistant Commissioner that the amount of Rs. 59,770 was not incurred by the assessee for charitable purposes but was incurred for some purposes which have nothing to do with the objects of the trust. The Tribunal also observed that it is not the case of the Department that the said expenditure of Rs. 59,770 was not incurred by the assessee for charitable purposes. In these circumstances, the Tribunal was right in holding that the sum of Rs. 59,770 adjusted against the income of the assessment year 1971-72 could be excluded from the income of the trust for the said assessment year for the purposes of assessment under Section 11(1)(a) of the Act.