Reasonable administrative expenditure for trust income upheld where prior findings and settled factual basis left no ground for interference.

Administrative expenditure of 7.5% of the trust's net income, after deducting trustees' remuneration, was treated as reasonable under the relevant Income-tax Act provisions. The issue was regarded as predominantly factual, and the earlier High Court view in the same trust's prior assessment years had already accepted the allowance. As that position had not been challenged by the Revenue, the Tribunal followed it, and the High Court refused reference under section 256(2). In these circumstances, there was no basis for interference, and the Revenue's challenge failed.

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Issues: Whether 71/2 per cent of the net income of the trust, after deduction of remuneration paid to the trustees, could be allowed as expenditure for administering the trust under sections 57(i) and 19(i) of the Income-tax Act, 1961, and whether the Revenue had any ground to seek reference or interference.

Analysis: The issue was treated as predominantly one of fact. The High Court had earlier, in the same trust's case for prior assessment years, held that 71/2 per cent of the net receipts after deduction of trustees' remuneration constituted reasonable expenditure for administering the trust under the relevant provisions. That decision had not been challenged by the Revenue. The Tribunal followed the earlier ruling and dismissed the Revenue's appeal, and the High Court declined to refer the matter under section 256(2) of the Income-tax Act, 1961. In these circumstances, there was no basis to interfere with the view already taken.

Conclusion: The allowance of 71/2 per cent as administrative expenditure was upheld, and the Revenue's appeals failed.

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