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2022 (3) TMI 1067 - AT - Income TaxAssessment of trust as Association of Persons (AOP) - Claim of revenue expenditure from the addition of gross receipt - Exemption u/s. 10(23C) denied - appellant trust was not registered u/s 12AA - HELD THAT:- In absence of registration u/s.12AA of the Act, the assessee has to be treated as an AOP for the purpose of calculation of tax liability in the hands of the assessee. In this situation, as per normal accounting principles and keeping in view the preposition rendered in the case of Shri Vaishnav Polytechnic College Govern by VSK Market Tech Educational Society [2020 (11) TMI 309 - ITAT INDORE] all incidental expenditure incurred by the assessee during the relevant financial period, wholly or exclusively for the purpose of marking or earning such income/receipts has to be allowed as per provisions of section 57(iii) of the Act and this legal provision has not been controverted by Ld. SR DR. Assessee, at Bar, has pleaded that since the total income of the assessee trust is ₹ 97,40,810/-, which is below ₹ 1,00,00,000/-, the audit report is not required in this case. He also vehemently pointed out that no audit report has been filed alongwith the e-return. Therefore, the presumption of Ld. CIT(A) that the assessee trust must have filed audit report, is not based on any documentary evidence furnished before us. However, the remaining amount i.e. receipts of income has to be treated as surplus for the purpose of taxation in the hands of the assessee for the relevant assessment year. Hence, the AO is directed to allow the expenditure incurred During the relevant period. Appeal of the assessee is allowed.
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