Treatment of Excess of Expenditure over Income in Trust

Where expenditure of trust exceeds its income, the excess can not be carried forward for application in subsequent years. While Computing excess, 15% of Income also not to be set aside. However, since excess expenditure is met out of corpus, loans, sundry creditors, the application in subsequent years shall be considered in the year of repayment of loan etc. Anjuman-E-Himayath-E-Islam [2015] 59 taxmann.com 379 (Chennai - Trib.) JUNE  2, 2015

 However in Maharashtra Industrial Development Corporation, ITA 6129/MUM/2013, dtd 05-03-2015, ITAT Mumbai relying upon assessee’s on case in (ITA No. 6752/Mum/2011 dated 15.03.2013) decided that excess of expenditure over income can be carried forward relying upon decision of Bombay High Court in Institute of Banking Personnel Selection 264 ITR 110