Case Law Details
Vishwa Kalyan Society Vs DCIT (ITAT Ahmedabad)
Brief facts of the case are, that the assessee is a Charitable Trust, having income under the heads Income from House Property and Income from Other Sources. The assessee has filed its return of income online on 29-09-2012 showing taxable income as NIL with a refund claim of Rs. 1,11,710. The said return was processed by centralized Processing Center of Income Tax Department, Bangalore. An intimation u/s 143(1) of the Act was issued on 03-03-2017 by Deputy Commissioner of Income Tax CPC, Bangalore and a demand of Rs. 1,24,770/- was imposed on account of disallowance of deduction claimed by the assessee u/s 24 for Rs. 12,61,080/- being 30% of the Income from House property of Rs. 42,03,600/-.
Ld Counsel of the assesse has explained the provisions of section 24 and pointed out that these provisions of Act are applicable to assessee and deduction u/s 24 is to be allowed.
We have heard the rival contentions, perused the material on record and duly considered facts of the case. We note that the learned CIT (A) had confirmed the order of the AO denying the deduction under section 24 of the Act after placing reliance on the order of Chennai tribunal in case of of Anjuman-E-Himayath-E-Islam ITA No. 2271 (MDS) of 2014 for A.Y.2009-10. However we find that the order which has been relied upon by the learned CIT (A) has been challenged before the Hon’ble Madras High Court in T.C.A No. 46 of 2021 reported in 127 com 78, where Hon’ble bench reversed the order of the Tribunal by observing as under:
10.1 As per the Income-tax Act, income” means “net income”, which is taxable. Income from property should be computed as per sections 22 to 27 of the Act and the income from business have to be computed under sections 28 and 44 of the Act. Such computed income is exempted from tax under sections 11 and 13, if 85% o f the same is spent on the charitable objects. Once the income is computed and determined 85% of such computed income should be utilized for charitable objects.
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