Dismissing the appeal of the revenue the Court held that the income derived from the Trust must be determined on the basis of commercial principles accordingly where expenses for charitable and religious purposes had been incurred in earlier year and said expenses were adjusted against income of a subsequent year, income of that year can be said to have been applied for charitable and religious purposes in year in which expenses had been adjusted as application of income. Followed CIT v. Shri Plot Swetamber Murti Pujak Jain Mandal (1995) 211 ITR 293 (Guj)(HC)
CIT(E) v. Kantilal Jaikishandas Choksi Charitable Trust (2021) 133 Taxman.com 217 (Guj.)(HC) Editorial : SLP of revenue is dismissed, CIT(E) v. Kantilal Jaikishandas Choksi Charitable Trust (2022) 284 Taxman 445 (SC)
S. 11 : Property held for charitable purposes-Expenses incurred earlier years-Adjusted to income of subsequent year-Income to be determined on the basis of commercial principle-To be considered as application of income. [S. 10(34), 11(1)(a), 11(1)(d)]