Double taxation principle excludes beneficiary-assessed trust income from gross total income for exemption under section 80T(a).

Income already assessed in the hands of the beneficiary under section 161 cannot be included again in the trust's gross total income for exemption under section 80T(a). Gross total income under section 80B(5) is computed under the Act before Chapter VIA deductions, and there is no basis to treat such income as part of the trust's total income merely because it was received by the trust. The principle against double inclusion of the same income in another assessee's hands applies, so the trust was entitled to the exemption.

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Issues: Whether amounts of trust income already assessed in the hands of the beneficiary under section 161 of the Income-tax Act, 1961 could be excluded while computing the trust's gross total income for the purpose of exemption under section 80T(a).

Analysis: Gross total income is defined in section 80B(5) as income computed under the Act before deductions under Chapter VIA and section 280-O. Income already assessed in the hands of the beneficiary under section 161 is excluded from the trust's total income by operation of the Act, and there is no basis in section 80B(5) to treat such income as part of gross total income merely because it was received by the trust. The principle that income taxed in the hands of another assessee cannot again be included in the assessee's income applies equally here, since the amount sought to be deducted does not fall within the limited items preserved by section 80B(5).

Conclusion: The amount assessed in the hands of the beneficiary was not includible in the trust's gross total income, and the assessee was entitled to the exemption under section 80T(a).

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