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2018 (9) TMI 1693 - AT - Income TaxExpenditure not related to assessee trust - Disallowance of Education & charity fund, provision for loan loss and capacity building fund - addition of expenditure incurred as nothing but an application of income and the same is not related to the business activity of micro financing - Held that:- As observed that the assessee has transferred a sum of ₹ 31,07,126.97 to reserve for loan loss, ₹ 25,00,000/- to education and charitable fund and ₹ 15,00,000/- to capacity building fund. The respective balance carried forward thereafter in these funds is ₹ 58,65,198.35, ₹ 48,80,657/- and ₹ 15,00,000/-, respectively. Thus, it is observed that these amounts were not spent by the assessee during the year for carrying out the objects of the assessee trust. Hence, these are not amounts applied in the objects of the trust. Hence, the Assessing Officer as well as the CIT(A) were fully justified in not allowing the deduction for the same while computing the income of the assessee. - Decided against assessee.
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