Section 11(1)(d) — the law in short
What the courts have decided on section 11(1)(d), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CIT v Programme for Community Organisation
Supreme CourtHelps taxpayer
We spent most of our donations on our objects in the same year. The officer now says our 15 per cent accumulation is worked out on what was left over after that spending. Is it worked out on the receipts or on the balance?
On the receipts. The Supreme Court dismissed the Revenue's appeal and left standing the Kerala High Court's answer: on the plain language of s.11(1)(a) the accumulation a trust is allowed is a percentage of its income derived from property held under trust, and the donations the trust received are that property. It is not a percentage of what survives after part of the income has been applied. The trust had received Rs 2,57,376 and applied Rs 1,70,369, leaving Rs 87,010. The Court held it could accumulate 25 per cent of Rs 2,57,376 and said it was unclear on what basis the Revenue contended for 25 per cent of Rs 87,010. The percentage is now 15, not 25.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
