JUDGMENT :

A.K. Sikri, J.

1. The Respondent-Assessee is a Public Charitable Trust. It filed its return for the Assessment Year 1994-95 declaring 'nil' taxable income. In the summary of total income filed by the Assessee it had mentioned gross income for the year in the sum of Rs. 99,41,221/- which represented interest receipts, rental income, bus collections, miscellaneous receipts and surplus in GRS hotel. It was further stated that out of this income the Assessee had applied and spent a sum of Rs. 47,27,533/- for the objects of the Trust. In the return it was also stated that it was setting apart a sum of Rs. 32 Lacs to be spent for charitable purposes in the following year. On that basis the assesses claimed that it was entitled to have the deduction of the entire amount and for the purpose of taxation the income was 'nil' Under Section 11 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act').

2. Before we proceed further and discuss as to how the Assessing Officer made the assessment, it would be necessary to take note of the provisions of Section 11 of the Act which are relevant for our purpose.

11. (1) Subject to the provisions of Sections 60 to 63, the following inc