2020 (6) TMI 296

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..... ave no hesitation to hold that even in absence of registration u/s.12A AO could assess only net income of the assessee and not the entire receipts because in absence of registration u/s.12A assessee should be assessed in the capacity of AOP on the commercial principles, wherein, the total gross receipts cannot be treated as income of the assessee without allowing revenue expenditure incurred by the assessee during the relevant same period and thus, we are inclined to hold that the authorities below were not right in disallowing the claim of expenditure of the assessee. AO has framed assessment u/s.143(1) of the Act without verifying the quantum of expenditure claimed by the assessee and the CIT(A) has not verified the same during the rel .....

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..... taking the total receipts of ₹ 1,72,83,668/- and dismissed the appeal of the assessee. 3. Aggrieved from the CIT(A) s order, the assessee is in further appeal before the Income Tax Appellate Tribunal. 4. Ld. AR before us submitted that the assessee is a registered trust running educational institute imparting ITI and Diploma engineering and earns income in the form of course fee and other fees. The CPC h as wrongly assessed the assessee only taking the total receipt of ₹ 1,72,83,668/- as income and determined the tax of ₹ 82,06,975/- without adjusting the expenditure which was incurred to earn that income which is not a prudent practice of tax law. To support his contentions, ld. AR relied on the order of the SMC Ben .....

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..... stration u/s.12A of the Act, the Assessing Officer could assess only net income of the assessee and not the entire gross receipts. Accordingly, we have no hesitation to hold that even in absence of registration u/s.12A of the Act, the Assessing Officer could assess only net income of the assessee and not the entire receipts because in absence of registration u/s.12A of the Act, the assessee should be assessed in the capacity of AOP on the commercial principles, wherein, the total gross receipts cannot be treated as income of the assessee without allowing revenue expenditure incurred by the assessee during the relevant same period and thus, we are inclined to hold that the authorities below were not right in disallowing the claim of expendit .....

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