INCOME TAX ACT, 1961

Section 24(a)

Income from house property - Computation - Charitable trust - Deduction under section 24(a)

One common issue raised before the Tribunal was related to assessee's claim of deduction under section 24 against income from house property. AO stated that it was noticed from computation of income submitted by assessee that it had shown rent receipt of Rs. 1,16,88,161 and had claimed standard deduction under section 24(a) of Income Tax Act of Rs. 35,06,448. Held: A bare reading of the section 24(a) makes it amply clear that the provisions of the Act do not provide any restriction whatsoever that any category of tax payer is excluded from this deduction. Therefore, the assessee a Trust was eligible for deduction under section 24 @ 30% of the rental income. It is settled law that the provisions of the Act have to be construed in a strict manner, when there is no ambiguity whatsoever in the provisions of the Act. Hence, extrapolation made by CIT(A) that the Trust shall not be entitled for deduction under section 24 of the Act in computation of income from house property was totally unsustainable in law.

Followed :ADIT v. Sri Sathya Sai Trust (ITA No. 7350 (Mum) 2011, vide Order, dt. 25-3-2013). Applied :CIT v. Institute of Banking Personnel Selection (IBPS) (2003) 131 Taxman 386 (Bom) : (2003) 264 ITR 110 (Bom) : 2003 TaxPub(DT) 1343 (Bom-HC).

REFERRED : CIT v. Programme for Community Organisation (2001) 248 ITR 1 (SC) : 2001 TaxPub(DT) 0854 (SC); CIT v. Institute of Banking Personnel Selection (2003) 131 Taxman 386 (Bom) : (2003) 264 ITR 110 (Bom) : 2003 TaxPub(DT) 1343 (Bom-HC); Sumitomo Corporation v. State of Tamil Nadu & Ors. (1982) 135 ITR 485 (Mad) : 1982 TaxPub(DT) 0157 (Mad-HC) CIT v. Programme For Community Organisation (1997) 228 ITR 626 (Ker.) : 1997 TaxPub(DT) 0843 (Ker-HC) and CIT v. Rao Bahadur Calavala Cunnan Chetty Charities (1982) 135 ITR 0485 (Mad) : 1982 TaxPub(DT) 0157 (Mad-HC)

FAVOUR : In assessee's favour

A.Y. :

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