The Tax Publishers2020 TaxPub(DT) 2808 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 24(a) read with section 14

Deduction under section 24(a) was not available where assessee was charitable trust and its income was exempt under section 11 because income from house property held under charitable trust was to be arrived in normal commercial manner without reference to provision of section 14.

Income from house property - Deduction under section 24(a) - Deduction whether available to assessee-charitable trust -

Assessee was a trust and claimed standard deduction at 30% of rent income. AO disallowed the same on allegation that income from house property held under trust have to be arrived in normal commercial manner without reference to provision of section 14. Held: Income from properties held under trust would have to be arrived at normal commercial manner without classification under various heads set out in section 14. Expression income has to be understood in popular or general sense and not in sense in which income is arrived at for purpose of assessment to tax by application of some artificial provisions either giving or denying deduction. Deduction under section 24(a) was not available where assessee was charitable trust and its income was exempt under section 11. Therefore, any part of income received by assessee from house property was applied for maintenance of same house property, same was allowed as application under section 11 and actual expenditure of maintenance shall be allowed as deduction under section 11. Therefore, there was no infirmity in holding that income from house property held under charitable trust was to be arrived in normal commercial manner without reference to provision of section 14.

Followed:DIT(Exemption) v. Girdharilal Shewnarain Tantia Trust (1993) 199 ITR 215 (Cal) : 1993 TaxPub(DT) 0188 (Cal-HC), CIT Estate of V.L. Ethiraj (1982) 136 ITR 12 (Mad) : 1982 TaxPub(DT) 0175 (Mad-HC), DIT (Exemption) v. Girdharilal Shewnarain Tantia Trust (1993) 199 ITR 215 (Cal) : 1993 TaxPub(DT) 0188 (Cal-HC), Hindustan Welfare Trust v. DIT (Exemption)(1993) 201 ITR 564 (Cal) : 1993 TaxPub(DT) 0233 (Cal-HC), CIT v. Seth Manilal Ranchhoddas Vishram Bhavan Trust, (1992) 198 ITR 598 (Guj.) : 1992 TaxPub(DT) 1166 (Guj-HC) and CIT v. Rao Bahadur Calavala Cunnan Chetty Charities (1982) 135 ITR 485 (Mad) : 1982 TaxPub(DT) 0157 (Mad-HC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 11 read with section 32

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