Law:

Section:

Section 11, read with section 63 of the Income-tax Act, 1961 [Corresponding to section 4(3)(1) read with section 16(1)(c) of the Indian Income-tax Act, 1922] - Charitable or religious trust - Exemption of income from property held under - Assessee installed a deity in a temple and to meet day to day puja expenses, created a legal obligation on himself by executing a deed of dedication in favour of deity, settling certain amount out of his income from fair - Assessee claimed deduction of certain sum, showing same as expenses towards maintenance of temple and deity - Whether since income arising out of profits of fair was accruing to assessee first, and part of it was then used or diverted for maintenance of deity but no property was set apart exclusively for maintenance of temple, income derived by assessee from said fair could not be said to be income derived under legal obligation and, hence, assessee was not entitled to exemption under section 4(3)(i) of 1922 Act - Held, yes FACTS The assessee installed a deity a temple in and for the performance of the worship of the deity he allotted a sum of Rs. 200 per month out of his income from fair (market). He also allotted a sum of Rs. 1,000 per year for the repairs and maintenance of the temple, which sum too, was payable from the income of that fair. The assessee created a legal obligation on himself by executing a deed of dedication in favour of the deity in which the details of the amount dedicated were given. In terms of the deed, the assessee deducted a sum of Rs. 2,051 showing the same as expenses towards the maintenance of the temple of the deity. This was disallowed, and the appeal before the AAC and the Tribunal, failed. On reference : FACTS It was true that the assessee had made a part of his income a charge to meet the obligation created by the deed of dedication, but no property had been set apart exclusively for the maintenance of the temple. The income arising out of the profits of the fair was accruing to the assessee first, and part of it was then used or diverted for the maintenance of the deity. It was hardly possible, therefore, to hold, in the circumstances of the instant case that the income…

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