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TMI Blog2023 (2) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... is entitled to claim a deduction of a sum equal to 30% of the annual value u/s 24(a) - We find that in CIT vs Rao Bahadur Calavala Cunnan Chetty Charities, [ 1979 (8) TMI 17 - MADRAS HIGH COURT ] held that the income from property held under trust would have to be arrived at in a normal commercial manner without reference to the provisions which are attracted by section 14. We direct the AO to disallow the deduction of 30% claimed by the assessee on rental income. As a result, grounds no. 1 and 2 raised in Revenue's appeal are allowed. Computation of exemption u/s 11 of the Act - CIT(A) directed the AO to allow 15% exemption under section 11(1)(a) and also directed that expenses be allowed to be set off to the extent of the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax (Appeals) 3, Mumbai, [ learned CIT(A) ], for the assessment year 2014 15. 2. In its appeal, the Revenue has raised the following grounds: 1. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) is justified in allowing the assessee's claim of benefit of 30% standard deduction from the rented property under the head of income from house property ignoring the judgment in the case of CIT Vs. Programme for Community Organization [2001] 248 ITR 1 (SC) and CIT VS, Rao Bahadur Calavala Cunnan Chetty Charities [1982] 135 ITR 485 (Mad) wherein it was clearly stated that the income of a trust is that which is available, so that the same is to be computed and arrived at in the commercial sense and it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . the income falling in section 11 is shown at Nil clearly showing that there is no error in processing u/s 143(1) of the I.T. Act and if there is any error in the return of income about such claim, without lawfully correcting the same, the exemption claimed by the assessee cannot be allowed u/s 143(1) of the I.T. Act. 5. The appellant prays that the order of the Commissioner of Income Tax (Appeals)-3, Mumbai be set aside and that of the Assessing Officer be restored. 6. The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary . 3. The issue arising in grounds no. 1 and 2, raised in Revenue‟s appeal, is pertaining to the grant of deduction under section 24(a) of the Act on rental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. Thus, the issue arises whether the assessee, being a trust, is entitled to claim a deduction of a sum equal to 30% of the annual value under section 24(a) of the Act. We find that the Hon‟ble Madras High Court in CIT vs Rao Bahadur Calavala Cunnan Chetty Charities, [1982] 135 ITR 485 (Mad.) held that the income from property held under trust would have to be arrived at in a normal commercial manner without reference to the provisions which are attracted by section 14. The relevant findings rendered by the Hon‟ble Madras High Court, in the aforesaid decision, are as under: The Tribunal has in a way mixed up the notion of total income in understanding the expression income from property held under trust . Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also consistent with the circular of the Central Board of Direct Taxes dated 19th June, 1968, reproduced in V.S. Sundaram's Law of Income Tax in India, 11th Edn., p. 798. 7. Thus, respectfully following the aforesaid decision of the Hon‟ble Madras High Court, we direct the AO to disallow the deduction of 30% claimed by the assessee on rental income. As a result, grounds no. 1 and 2 raised in Revenue‟s appeal are allowed. 8. The issue arising in grounds No. 3 and 4, raised in Revenue‟s appeal, is pertaining to the computation of exemption under section 11 of the Act. 9. The brief facts of the case pertaining to this issue are: During the year, the assessee earned total revenue of Rs.35,10,20,199, while it in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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