INCOME TAX ACT, 1961

Section 11

Charitable trust - Exemption under section 11 - Income derived from property held under trust under section 11 - Deemed rental income

Assessee, a Charitable Organization under section 12A, claimed exemption under section 11. During the year, assessee received rent on account of hiring of the building of Indian Cancer Society to various doctors and other medical professionals. It was receiving very low rent from the tenants. AO treated the notional rent prevailing in the area and differential rent was assessed and added to income of assessee. Held: Provisions under section 11(1)(a) provide about actual receipt of income and actual expenses incurred for that and deemed income is not to be assessed. In the present case, factual situation was not different such as land has been allotted by Collector and valuation was done in view of the valuation report, in which the valuation assessed of the carpet area which was accepted by Charity Commissioner as per clause-8. The notification, dated 11-6-1988 speaks about this fact that provisions of Part-II of the Bombay Rents, Hotel and Lodging House Rates Control, Act, 1947 was not applicable to the case of assessee-trust, therefore, no deemed rent was liable to be assessed in the case of assessee, hence, order was liable to be set aside.

REFERRED : HEH Nizams Religious Endowment Trust v. CIT, AP (1966) 59 ITR 582 (SC) : 1966 TaxPub(DT) 221 (SC), CIT v. Ganga Charity Trust Fund (1986) 162 ITR 612 (Guj) : 1986 TaxPub(DT) 1014 (Guj-HC), CIT, Central I, Calcutta v. Jayashree Charity Trust (1986) 159 ITR 280 (Cal) : 1986 TaxPub(DT) 441 (Cal-HC)

FAVOUR : In assessee's favour.

A.Y. :

SUBSCRIBE FOR FULL CONTENT