Educational and charitable trust

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ganesh (Querist)
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22 October 2018 While calculating 85% of application the assessing officer has not considered the repayment of loan. The AO's contention is it will amount to double deduction as the capital asset acquired out of the loan was already considered. Whether the stand taken by the AO is correct

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 October 2018 Yes AO is right. But the right way is capital asset acquired out of loan should not be considered but loan repayment should be considered.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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23 October 2018 Capital asset acquired out of loan cannot be allowed as a deduction since it is not
an 'application of income'. However, repayment of loan out of income of the trust
is an application rightly to be allowed u/s.11.

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