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Section 37(1) of the income-tax act, 1961-Business expenditure-Assessee-company was trustee of religious and charitable trust-ITO paid management charges to an association for managing its affairs-ITO and ACC rejected claim for deduction of such charges paid-Tribunal allowed assessee's claim-Whether tribunal right in law-Held, yes Facts The assessee-company was the trustee of a religious and charitable trust within the meaning of section 11. Its affairs were managed by another trust association to whom it paid Rs. 10,000 as management charges and claimed the same as an admissible deduction. The ITO rejected the claim on the grounds (i ) that the exact amount actually incurred for such management was not ascertainable; and (ii ) that there was no necessity for any other expenditure (apart from salary allowances, legal charges, postage and other incidental charges) for its management, especially, when its sources were only income from rent and interest. On appeal, the AAC confirmed the ITO's order. On further appeal, the Tribunal upheld the assessee's claim, holding (i) that the assessee was governed by the Charitable and Religious Trust Act, 1922 (and not by the Indian Trust Act, 1882) and the Act did not place any restriction on payment of remuneration to the trustees for managing the trust affairs; and (ii) that the impugned payment was for the purpose of the trust and was for the services rendered. On reference: Held On the basis of facts found by the Tribunal and for reasons recorded by it, the Tribunal was right in holding that the impugned payment of Rs. 10,000 was an admissible deduction. JUDGMENT R.R. Rastogi, J. - This reference under section 256(1) of the Income-tax Act, 1961, hereafter "the Act", relates to the assessment year 1972-73. The assessee is a company incorporated under section 25 of the Companies Act. It is the trustee of a trust known as B.I.G. Mission, Kanpur Trust, which is a religious and charitable trust within the meaning of section 11 of the Act. The affairs of the assessee are managed by the Lucknow Diocesan Trust Association, hereafter the association. In the previous year relevant to the year under consideration the assessee had…

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