Cit vs Institute Of Banking Personnel ... on 9 July, 2003
"5.......The CIT(A) has made a reference in
those assessment years to section 11(4) of the
Income-tax Act In the case of CIT Vs. Institute
of Banking reported in 264 ITR page 110 an
argument was raised before the Hon'ble
Mumbai High Court by the revenue that in the
6 ITA No. 1536/Del/2014
Association of Management Studies
case of a charitable trust, their income was
assessable under self contained code mentioned
in section 11 to 13 of Income-tax Act and that
the income of the charitable trust was not
assessable under the head "profit and gains of
business" u/s 28 in which the provision for
carry forward of losses was relevant According
to the revenue, there was no provision for carry
forward of the excess of expenditure of earlier
years to be adjusted against the income of
subsequent years. This argument was rejected
by the Bombay High Court and it has been held
that income derived from the trust property has
also got to be computed on commercial
principles and if commercial principles are
applied then adjustment of expenses incurred
by the trust for charitable religious purpose in
the earlier years against the income earned by
the trust in the subsequent year will have to be
regarded as application of the income of the
trust for charitable and religious purpose. The
learned CIT(A) has followed this decision apart
from others referred above......"