Law:

Section:

Section 24(1)(iv) of the income-tax act, 1961 [As it stood prior to 1-4-1969]-Income from house property-Deductions-Issueless widow executed deed providing that, after her death, all her house properties would vest in assessee-deity, and that expenses on pujas of assessee-deity as well as four other deities should be met out of income from such properties - Whether, after her death, expenses on pujas of four other deities, but not on pujas of assessee-deity, would constitute 'annual charge' under section 24(1)(iv), and would be deductible in computing income from such properties-Held, yes Facts A, an issueless widow, executed a deed providing, inter alia: (i) that on her demise, all her house properties would be vested in the assessee-deity, being installed in a private temple established by her; ( ii) that her two brothers were to be the shebaits after her death, and (iii) that the expenditure on the pujas of the assessee-deity and four other deities would be met out of the income from the properties vested in the assessee-deity. On A's death, all her property got vested in the assessee-deity. During the relevant accounting year, the shebaits incurred certain expenditure in performing pujas of the assessee-deity and the four other deities and claimed deduction of the same under section 24(1)(iv). The ITO disallowed the claim. On appeal, though the AAC upheld the ITO's order, the Tribunal, on second appeal, upheld the assessee's claim in full. On reference: Held It is well-settled that any expenditure incurred by an owner on himself/itself or any obligation of the owner to incur certain expenditure on himself/itself could not form part of any annual charge on the property because the assessee himself/itself is the owner of the property. Consequently, the moment the assessee-deity became vested with the property and became the legal owner of the property, the expenditure incurred on that deity must be considered to be expenditure incurred by the assessee-deity on itself and would not be in discharge of an obligation of an annual charge under section 24(1)(iv ). Accordingly, the puja expenses on the assessee deity were not deductible. The expression 'charge' in…

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