JUDGMENT

MRS. A. SUBBULAKSHMY, J.----
At the instance of the Revenue, the following questions have been referred to us for our consideration:"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the donation of Rs.31,,050 made by the assessee to another institution, would tantamount to application of income for charitable purposes, thus satisfying the requirements of section 11? and(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the deficiency of funds of this year could be set off against the earlier year's surplus?"During the assessment year 1984-85, the assessee-trust had donated a sum of Rs.31,050 to another charitable trust known as the service trust. The assessee-trust claimed exemption under section 11 of the Act, which was rejected by the Income-tax Officer. On appeal, the Commissioner. (Appeals) had allowed the claim of the assessee. The Tribunal had...