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2022 (4) TMI 1065 - AT - Income TaxAssessment of trust - Computation of income and income as computed by CPC - excess application of income - additions were on account on non-compliance of the provisions of the Act and therefore, the exemption as applicable to Trust on this income would not be available to the assessee - CIT(A) noted that the assessee itself filled Column 5(vi) amount disallowable u/s 11(1) r.w.s. 40(a)(ia) and then failed to disallow the same - HELD THAT:- To compute the application of income, the disallowance as mentioned in Sec.40(a)(ia) or Sec.40A(3) / (3A) shall be added back and not considered as application of income. After perusal of Form No.10B as placed on record, it could be seen that the assessee has applied an amount for the purpose of charitable trust. However, as per Explanation-3 to Sec.11(1), the disallowance u/s 40(a)(ia) would not be considered as application of income. Thus, the amount which has been applied for charitable purposes would be differential amount. The assessee has earned income of ₹ 5,17,39,216 out of which an amount of ₹ 5,06,87,511/- (as computed above) has been applied for charitable purpose. The balance i.e., ₹ 10,51,705/- would be the income of the assessee since as per Form No.10B, the assessee has not set-apart any amount for application is subsequent years. This income is the same which has been computed by the assessee in its computation of income and paid taxes thereon. Therefore, correctly applying the provisions of law, the assessee’s income is to be computed as ₹ 10,51,705/-. Merely because there is mistake in filing the corresponding columns in the return of income, the same would not result into enhancement of the assessee’s income. Therefore, we direct CPC to rectify the intimation and compute the income as ₹ 10,51,705/- as offered by the assessee to tax. We order so.
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