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Application of Income in Trust/society

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Sameer

38 Points Posted on 25 January 2021

Investments in trust were made against accumulation of surplus. Subsequently, these investments had to be written-off pursuant to RBI directions. The question is - whether the loss on such write-off can be considered application of income ? If not then,it will be a double jeopardy for the assessee. Kindly help.Thanks

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Quick Summary

This discussion concerns whether a loss incurred from writing off investments held in trust, due to RBI directions, qualifies as an 'application of income'. The original investments were made from surplus funds. If this write-off is not deemed an application of income, the assessee faces a 'double jeopardy' situation. Further clarification is sought regarding the specific bonds affected by the RBI's directive.