In this sum 5 lakh is the amount applied for the foundation of the trust. We did subtracted the amount from the cost so tax is not applied on that amount, but I am not able to understand why did we add that 5 lakh in the income..
We are also subtracting it from the cost and also adding it to the income. This means we are adding income of 10 lakhs whereas the service provided to the founder is of only 5 lakhs..
Yeah there is double treatment for such type of activities such that trust doesn’t get involved in such sought of activities. To discourage the trust. First we will not consider it’s as applied and we will also add such to the income of the trust, such that trust doesn’t benefit any particular section.