Law:

Section:

Section 11(1)(a) of the Income-tax Act, 1961 - Charitable or religious trust - Exemption of income from property held under - For relevant assessment year, assessee-trust claimed deduction on account of. 25 per cent accumulation of its income - For purposes of calculating permissible limit of accumulation of assessee's income under section 11(1)(a) Tribunal excluded rental income received by assessee on ground that specific expenditure had been incurred to earn - Whether Tribunal was justified in its view - Held, no Facts For the relevant assessment year, the assessee-trust claimed deduction on account of 25 per cent accumulation of its income. The Tribunal held that the amount of rents collected by the assessee-trust against which specific expenditure for maintaining the property was incurred could not be said to constitute the assessee's income and, therefore, the said rental income should be excluded from the assessee's income for the purpose of ascertaining the permissible limit of accumulation under section 11(1) On reference: Held From a perusal of section 11(1)(a ), it is clear that the reference in subsection (1) of section 11 is to income and not to total income as defined in section 2(45). Therefore, in the instant case, for the purpose of calculating permissible limit of accumulation of income under section 11(1)(a), the Tribunal was not justified in deducting the sum received by the assessee by way of rental income. Masani for the Applicant. R.C. Mukati for the Respondent. ORDER Sohani, J. - By this reference under section 256(1) of the Income-tax Act, 1961 ('the Act'), the Tribunal, Indore Bench, has referred the following question of law to this Court for its opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 17,414 being rental income, should be excluded from the total income of Rs. 73,484.06 (which sum includes the rental income of Rs. 17,414) of the trust for the purpose of calculating the permissible limit of accumulation of income under section 11(1) of the Income-tax Act, 1961 ?" 2. The material facts giving rise to this reference, briefly, are as follows: The…

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