9911796707
TMI Blog2023 (12) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross receipts cannot be taxed in the hands of the assessee trust. The income earned by the assessee and expenditure relatable to the earning of such income is to be allowed as a deduction. The Bangalore Bench of the Tribunal in the case of H M V Educational Cultural and Social Trust Vs. ITO [ 2023 (3) TMI 1151 - ITAT BANGALORE ] restored the matter to the AO with a direction to assess only the net income and not the gross. Thus restore the matter to the AO. The AO is directed to examine the financials of the assessee and allow the expenditure which have been incurred for earning the income of the assessee. We make it clear that since in the absence of registration under section 12AA of the Act, there is no question of any applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 3. Brief facts of the case are as follows: Assessee is a charitable trust. For the Assessment Year 2018-19, the return of income was filed on 25.10.2018 declaring Nil income. The CPC issued an intimation under section 143(1) of the Act wherein it had added a sum of Rs. 19,79,297/- and raised a demand of Rs. 7,58,694/-. The assessee filed rectification under section 154 of the Act and the same was rejected and the entire receipts were taken as income and taxed. 4. Aggrieved, assessee filed appeal before the First Appellate Authority (FAA). The CIT(A) issued various notices of hearing. In response to the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application of income. However, the gross receipts cannot be taxed in the hands of the assessee trust. The income earned by the assessee and expenditure relatable to the earning of such income is to be allowed as a deduction. The Bangalore Bench of the Tribunal in the case of /s. H M V Educational Cultural and Social Trust Vs. ITO (supra) restored the matter to the AO with a direction to assess only the net income and not the gross. The relevant finding of the Bangalore Bench of the Tribunal reads as follows: 7.3 The assessee has not raised the plea before the Income Tax Authorities that it has to be given deduction u/s 57 of the I.T.Act, in respect of expenditure for earning the interest income. However, inspite of such plea not being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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