TMI Blog2023 (3) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be allowed in computing the amount of income available after entering such income at gross level. If suppose, in a later year, the amount of tax deducted at source in this year is refunded fully or partly, the amount of such refund shall fall for consideration on the income side of the Income and expenditure account. On a specific query, the ld. AR pointed out that income-tax refund was granted to the assessee in the succeeding year for a sum of Rs.1,55,39,950/-, which was duly included on the income side of the Income and expenditure account. As gone through the Income and expenditure account for the succeeding year ending 31-03-2017, in which the last item on the Income side is Income-tax refund amounting to Rs.1,55,39,950/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that deduction of tax at source was from the interest income, which was, in fact, accounted for on gross basis on the Income side. Not convinced, the AO held that the claim of TDS as application of income was wrong. He, therefore, made an addition of Rs.22,67,406/-. The ld. CIT(A) countenanced the assessment order on this score. Aggrieved thereby, the assessee has come up in appeal before the Tribunal. 4. I have heard both the sides and gone through the relevant material on record. The assessee is a charitable trust engaged in educational activities. The authorities below have held that TDS cannot be treated as application of income so as to qualify for deduction in computing the total income exempt under the Act. The issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essence of the provisions is that there should, firstly, be the income available at the disposal of the trust capable of either application or accumulation for later application. Income available to a trust in such a scenario can only be its commercial income and not the income computed in accordance with the provisions of Chapter IV-D of the Act. Such income available can be computed after excluding the relevant outgoes, including not only the expenses incurred in connection with such income but also taxes paid in respect thereof. Unless the taxes paid are deducted, it cannot be said that the amount of income, to that extent, is available for application or accumulation. 5. The AO has made out a case that the amount of tax deducted at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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