Trust Registration cannot be cancelled for unexplained expendture incurred on the objects of trust

If it is to be held that the assessee has incurred certain expenditure and the source of expenditure remains unexplained, the amount can be added under section 69C of the Act. However, if on one hand the amount is added as unexplained expenditure, still it retains the character of the expenditure incurred on the object of trust. Therefore, the assessee will be entitled to claim deduction while computing its income under sections 11 & 12 of the Act. The Proviso inserted to section 69C by Finance (No.2) Act, 1998 w.e.f. 1.4.1999 will not apply as in the present case the income of the assess...