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TDS Applicability- Public Charitable/Religious Trust

Below case laws the above provision is not applicable for Trust Since Its part of Budget 2018 so same Should be applicable after 01/04/2019 In the case of Mrs. Sushila Mallick vs. ITO reported in 19 com233, the Hon’ble Lucknow ITAT has held that the brokerage had been paid on account of sale of the properties, the income of which had been shown under the head ‘short-term capital gain’. The selling of properties was not the business of the assessee and, as such, the amount involved in the transaction relating to the selling of properties was not the part of turnover of the assessee. In view of same the Hon’ble ITAT held that in facts of the case the provisions of Section 40(a)(ia) of the Act is not applicable. •In the case of Mahatma Gandhi Seva Mandir vs. DDIT(Exempt) reported in 21 com321 the Hon’ble ITAT has held that the exception in Section 40 is carved out, only for the purpose of Section 28 and not for computing the exemption of income of a charitable trust under Section 11. The disallowance made under Section 40(a) will only go to enhance the business profit of an assessee whose income is assessable under Section 28 and not otherwise. Hence, provisions of Section 40(a) are not applicable in case of charitable trust or institution where income and expenditure is computed in terms of Section 11. Mahendra Doshi 15/09/2019

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