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2019 (9) TMI 1713 - ITAT CHENNAIAssessment of trust income - Exemption u/s 11 rejected - return was processed u/s 143(1) - admittedly registration was not available u/s 12AA - HELD THAT:- Admittedly, registration u/s 12AA of the Act was not available to the assessee during the year under consideration. Therefore, income of the assessee has to be computed commercially by allowing all the expenditure for earning the income. In other words, the total expenditure incurred by the assessee for earning the income has to be reduced and whatever remains has to be brought for taxation. As rightly submitted by assessee, the corpus donation has also to be taken as income / receipt. Since such an exercise was not done, this Tribunal is of the considered opinion that the matter needs to be re-examined by the AO. Accordingly, orders of both the authorities below are set aside and the AO is directed to take the net income after reducing the expenditure and levy tax thereon. We are conscious that proceeding arises for considering is u/s 143(1) - This is prima facie adjustment, therefore, the AO while considering the matter, has to keep in mind the provisions of Section 143(1) of the Act which enables him to make prima facie adjustment. Both the appeals filed by the assessee are allowed for statistical purposes.
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