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2023 (5) TMI 274 - AT - Income TaxAssessment of trust - Deduction u/s 57(iv) - interest received on compensation by the assessee from Govt. of Rajasthan in respect of compulsory acquisition of land - whether Income of the trust is inclusive of all the income and no separate deduction is allowable while determining the income u/s 11? - HELD THAT:- We have perused the provisions of Section 56(2)(viii) which provides that income by way of interest received on compensation or on enhanced compensation would be treated as income u/s 56(1) as income from other sources and provisions of Section 57(iv) provides that in the case of income of the nature referred to in clause (viii) of sub-section (2) of section 56, a deduction of a sum equal to fifty per cent of such income would be allowed and no deduction shall be allowed under any other clause of this section. It is apparently clear from perusal of the provisions of section that the interest received by the assessee on compensation is taxable under the head income from other source and while computing the income of the assessee a deduction has to be allowed 50% and no other deduction shall be provided under any other clause of this Section but there is no bar in claiming exemption of compensation income u/s 11 of the Act as the section specifically provides that under this section which is 57 of the Act no other deduction shall be allowed. Besides the case of the assessee finds supports from couple of decisions namely DIT(E) Vs. Jasabai Foundation [2015 (4) TMI 305 - BOMBAY HIGH COURT]wherein it has been held that income which the assessee trust has not included by virtue of section 10 could not be considered under section 11. The underlying facts in this case are that the dividend income which was claimed as exempt u/s 10(33) of the Act. According to the AO the said income formed a part of income from trust property and therefore can only be claimed to be exempt u/s 11 of the Act if applied for charity and not u/s 10(33) of the Act. On this basis the AO disallowed the exemption u/s 10(33). The order of the AO was confirmed by ld CIT(A) but tribunal seta side the same. The Hon’ble High Court on appeal upheld the order of the tribunal. In ACIT Vs Saurashtra Trust [2006 (10) TMI 381 - ITAT MUMBAI] wherein it has been held that in the case of the trust income should be classified under various heads such as house property, capital gain and other sources and held that the assessee would be entitled to deductions on account of income computed under each head. Therefore we do not find any infirmity in the order of Ld. CIT(A) and accordingly the appeal of the revenue is dismissed.
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