The Income Tax Appellate Tribunal (ITAT), Delhi Bench while dismissing the revenue’s appeal allowed Delhi Public School Society’s claim of carry forward of losses.
The Revenue urged that the CIT(A) has erred in law in allowing the claim of carry forward of losses disregarding the fact that set-off and carry forward of losses are dealt with by the provisions of section 70 to 74 of the Income Tax Act.
The Counsel of the assessee submitted that, in identical facts, in the assessee’s own case, the Co-ordinate Bench of ITAT, Delhi has already taken a view, on the disputed issues, in favour of the assessee for Assessment Year 2013-14.
The coram consisting of Sudhanshu Shrivastava and Anadee Nathmisshra took into consideration the decision of Delhi High Court in the case of DIT vs. Raghuvanshi Charitable Trust wherein it was that a trust can be allowed to carry forward the deficit of the current year and to set off the same against income of subsequent years.
Therefore, the ITAT while the decision in favor of the assessee held that adjustment of deficit of current year against income of subsequent year would amount to the application of income of the trust for charitable purposes in subsequent years within the meaning of section 11(1)(a).
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