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Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2012 In case of a Charitable/ religious trust if it is purchasing stones for building temple (let me specify, not for any business) by paying cash above 20,000/- whether such trust will come under the ambit of section 40A(3).

Here i want to specify that building of temple is not an expense of revenue nature.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 September 2012 40A(3) disallowance is for computing income under the head 'income from business or profession' whereas the income of a charitable trust generally, if not doing any business, is computed under 'income from other sources' for which the referred section need not be looked into.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 September 2012 thanks Mr. Chackrapani.
the reply received from your side is fully saticfying.

Now if a trust enter into a contract with a builder to construct a temple in the land owned by the trust against which the builder is allowed to build a residential block in a part of that land. Trust will also have ownership on some flats of such block. If trust want to sell those flats whether it will attract tax or not

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