TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 1083
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.... issue raised relates to assessee's claim of deduction u/s. 24 of the I.T. Act against income from house property. The Assessing Officer dealt with the issue as under :- The AO stated that it was noticed from the computation of income submitted by the appellant that the appellant has shown rent receipt of Rs. 1,16,88,161/- and has claimed standard deduction u/s 24(a) of the IT Act of Rs. 35,06,448/-. The AO further stated that submission and justification made by the appellant trust vide letter dated 14.08.2015 has been carefully perused and considered. However, the submissions made are not acceptable on the basis of following grounds:- a. As per circular of CBDT No. 5-p [LXX6] dated 19.06.1968, where in it is stated that he income ....
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....lowing income shall not be included in the total income of the previous year........'. The reference in section 11(1) and sub section (a) is invariably to 'income' and not to 'total income'. Total Income' has been specifically defined in Section 2(45) of the Act as 'the total amount of income referred to in section 5, computed in the manner laid down in this Act'. Therefore, the word income used in section 11(1A) is distinct to the expression 'total income' vide section 2(45) of the IT. Act, 1961. The CBDT in its Circular No. 5 LXX-6 of 1968 dated 19.06.1968 further explained that 'where the trust derives income from House Property, Interest on securities, Capital Gains or other sources, the wor....
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....r the decision of the Tribunal in the case of Sathya Sai Trust relied upon by the assessee. Thus, for the above noted reasons and legal position, the deduction claimed by the appellant under section 24 of the IT Act, 1961 is not allowable. The action of the A.O. of disallowing the claim of deduction made by the assessee is therefore, upheld." 5. Against this order the assessee is in appeal before us. We have heard both the counsel and perused the records. We find that for computing income under the head 'income from house property', section 24 of the Act provides that income chargeable under this head shall be computed after making following deductions namely :- (a) sum equal to 30% of the annual value &....
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.... was denied by the Revenue. In this view of the matter in our considered opinion the assessee is entitled to deduction u/s. 24 of the Act. Following the precedent as above, we direct accordingly. Since we are deciding the issue following the Hon'ble Bombay High Court decision as above, other decisions relied upon by the Revenue are not applicable. One common issue raised relates to disallowance of claim of accumulation of unutilized funds. 8. The Assessing Officer has dealt with the issue as under :- "The AO stated that it was observed that during the year under consideration, the appellant trust added accumulation income of AY 2008-09 of Rs. 18,50,000/- as it was not spent. Further the said amount taken as accumulation made u/s....
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....f the appellant that the unspent accumulation is set aside for the same purpose of constructing school and college is not permissible as per sec 11(2) of the Act. It is because, the unutilized accumulation of the appellant of AY 2008-09 is in the nature of deemed income , whereas sec 11(1) uses the phrase "income derived from property" for the purposes of allowing the benefits of accumulation u/s 11(2) of the Act . Thus, the deemed income u/s 11(3) should not be taken as part of the income derived from the property for accumulation purpose as claimed by the appellant in its computation. I find the AO has rightly excluded Rs. 18,50,000/- out of the assessed total income to arrive at the accumulation u/s 11(2) of the Act. 7.3.2 In regard to....