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2020 (6) TMI 531 - AT - Income TaxExemption u/s 11 - addition made towards refund of excess made to M/s. SIC - as per AO Assessee ought not to have refunded to M/s. SICL and he was of the opinion that the refund is hit by the provisions of section 13(1)(c) & 13(2)(g) r.w.s. 13(3) - HELD THAT:- As decided in own case [2016 (7) TMI 1578 - ITAT VISAKHAPATNAM]excess amount refunded to M/s. South India Corporation Ltd. does not amount to diversion of funds as defined u/s 13(2)(g) of the Act. The assessee has refunded excess amount collected from the party by way of anonymous decision of the Board of Directors of the Trust further supported by proof of payment. Therefore, we are of the view that the A.O. was not correct in holding that the assessee has violated the provisions of section 13(1)(c) & 13(2)(g) r.w.s 13(3) of the Act. Hence, we direct the A.O. to allow the exemption as claimed by the assessee and delete the additions made towards refund of excess amount. Payment of income-tax as an allowable deduction while computing income of trust - HELD THAT:- Income-tax payment made by the assessee is an application of income, hence, addition cannot be made - See assessee's own case [2016 (7) TMI 1577 - ITAT VISAKHAPATNAM] relying on TRUSTEE OF H. EH THE NIZAM´S SUPPLEMENTAL RELIGIOUS ENDOWMENT TRUST [1978 (2) TMI 7 - ANDHRA PRADESH HIGH COURT] Disallowance of various expenses in absence of registration u/sec. 12A - HELD THAT:- We find that when the Assessing Officer passed the assessment order the assessee was not having 12A registration. Subsequently, on [2015 (5) TMI 1210 - ITAT VISAKHAPATNAM] has restored 12A registration to the assessee. Therefore, the ld. CIT(A) by considering the same is of the opinion that these are the expenditure incurred by the assessee are in the nature of application of income, hence, allowed. We find no infirmity in the order passed by the ld.CIT(A). Rejection of books of account and estimation of income - AO estimated the income at 12% - CIT(A) deleted the addition on the ground that assessee is following consistently cash system of accounting - HELD THAT:- As decided in own case [2016 (7) TMI 1578 - ITAT VISAKHAPATNAM] we are of the view that the assessee is following Cash System of accounting for determination of income for the purpose of application of income for charitable purpose. Therefore, we direct the A.O. to compute the income as per the method of accounting followed by the assessee.
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