TMI Blog2013 (9) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... le activities - Office premises of the President was taken by the trust on reasonable rent. Perhaps other premises might be more costly - So, the rent is allowable deduction - President and the Secretary of the trust are providing voluntarily services to the trust. They are not charging any fee/remuneration for their services. By keeping the office in the same building where they are residing, the activities can be looked after without making any expenditure on conveyance. As per the tenancy agreement, there is no provision for separate electricity meter. It is not explained whether there was an arrangement of sub meter or not - Perks are higher than salary/remuneration. In the instant case, the President and Secretary are not charging a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This case has a long history of the litigation. Originally, the assessee filed the return showing nil income after claiming exemption u/s 11 of the Income Tax Act, 1961. However, the assessment was completed under section 143 (3) of the Act on total income of Rs.65,56,933/- consisted of Rs.63,69,322/- as surplus and Rs.1,87,611/- disallowed as rent and electricity paid for the premises, partly occupied by the founder trustee of the trust and the Secretary of the trust. The appeal of the assessee was dismissed by the CIT(A) vide his order dated 13.01.2006. In second appeal, the Tribunal vide its order dated 23.11.2007 set aside the CIT(A)'s order and remanded the matter to the CIT(A) with certain directions. In second round of the litiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st and the assessee trust. Initially, the agreement was for 11 months. He also submits that the tenant is liable to have a separate electricity connection within a period of two months from the date of agreement. The assessee-trust never took a separate electricity connection. The said premises is basically occupied by Sri Zaheer Ahmed Siddiqui, President of the trust who was conducting activities of the trust from its ground floor. On Iind floor, the premises was occupied by the President of the trust for his residential purpose. In a charitable trust, it was not expected that the office bearers will be claiming the rent and electricity expenses for their personal use. So, the expenses of Rs.1,87,611/- was incurred by the trust for the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and on perusal of the record, it appears that the trust is a registered trust since 1994. Its activities are not doubtful regarding charitable activities. For the purpose, the trust needs some office premises and also electricity etc. In the instant case, the office premises of the President was taken by the trust on reasonable rent. Perhaps other premises might be more costly. So, the rent is allowable deduction. From the record, it also appears that the President and the Secretary of the trust are providing voluntarily services to the trust. They are not charging any fee/remuneration for their services. By keeping the office in the same building where they are residing, the activities can be looked after without making any expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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