Allowing the appeal the Court held Central Board of Direct Taxes has issued a Circular No.5-P dated 19.05.1968, which provides that the word ‘income’ in Section 11(1a) of the Act must be understood in commercial sense and the entire income of the trust in the commercial sense has been spent for the purpose of charity. The real income of the trust is exempt to the extent to which some income is applied to such purposes in India. . However the Appellate Tribunal has not examined the case of the assessee on the touchstone of well settled legal principles. Accordingly the order was quashed and directed the Appellate Tribunal to decide accordance with law. (AY. 2007-08)
Cutchi Memon Union v. Dy. CIT(E) (2020) 195 DTR 351/(2021) 318 CTR 335 (karn) (HC)
S. 254(1) : Appellate Tribunal – Duties- Charitable Trust – Computation of income -Commercial sense – Matter remanded [ S. 2(24), 2(45), 11 ]