Charitable trust can claim section 24 house-property deduction when computing rental income for section 11 purposes.

A charitable trust assessing rental income under the head income from house property for section 11 purposes is entitled to the standard deduction under section 24. The Tribunal reasoned that the Income-tax Act contains no exclusion denying a charitable trust the benefit of section 24 where the income is otherwise taxable under that head, and that the provision itself permits the statutory 30% deduction from rental income. The Assessing Officer's attempt to confine computation to a commercial basis was therefore rejected, and the disallowance of the deduction was held unsustainable.

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Issues: Whether a charitable trust computing income from house property for the purpose of section 11 is entitled to the standard deduction under section 24 of the Income-tax Act, 1961.

Analysis: The trust had received rental income and claimed the statutory deduction available under section 24. The income-tax authorities sought to deny the deduction on the footing that the trust's income had to be computed only on a commercial basis for the purpose of section 11. The Tribunal held that there is no provision in the Act excluding a charitable trust from the benefit of section 24 where the income is assessable under the head income from house property, and that section 24 itself allows the deduction of 30% of the rental income.

Conclusion: The trust was entitled to claim deduction under section 24, and the disallowance made by the Assessing Officer was unsustainable.

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