Issue
Whether
disallowance under sections 40(a)(ia) and 43B could be made in a case of trust
enjoying exemption under section 11 of the Income-tax Act (‘Act’)?
The tribunal held as under-
1)
Sections 11, 12 and13 deal with income from property held for charitable or religious purposes and
the mode of computation of income subject to certain conditions. Accordingly,
income of any charitable trust or society is exempt from tax, if such
conditions are fulfilled.
2)
Sections 40(a)(ia)
and 43B fall under Chapter IV-D of the Act. The said Chapter deals with
computation of profits and gains from business or profession. The profits and
gains from business or profession are computed under section 28. Section 29
provides the manner of computation of income under the head "profits and
gains of business or profession", which states that the income referred to
in section 28 shall be computed in accordance with the provisions of sections28 to 43D.
