TMI Blog1986 (7) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ich 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 ?" The material facts giving rise to this reference, briefly, are as follows : The assessee is a trust and the assessment year in question is 1976-77. Under section 11(1) of the Act, the assessee claimed deduction on account of 25% accumulation, of a sum of Rs. 17,894. This contention was rejected by the Income-tax Officer. But on appeal, the Appellate Assistant Commissioner upheld the contention of the assessee. On further appeal before the Tribunal by the Department, the Tribunal held that "that the Appellate Assistant Commissioner had proceeded to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of the income itself. At the same time, we agree with the representative of the assessee that the office and other miscellaneous expenses incurred by the assessee in connection with the running of the institution would qualify for allowance under section 11(2) in other words, the deduction presumably allowable under this sub-section would come to Rs. 14,015 (1/4 of Rs. 73,484-Rs. 17,414) instead of Rs. 17,894 claimed by the assessee." Aggrieved by the order passed by the Tribunal, the assessee sought reference and it is at the instance of the assessee that the aforesaid question of law has been referred to this court for its opinion. During the course of argument, learned counsel for the assessee and for the Department, agreed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the income so accumulated or set apart is not in excess of twenty-five per cent. of the income from such property." From a perusal of the aforesaid provisions, it is clear that the reference in sub-section (1)(a) of section 11 is to income and not to "total income" as defined in section 2 (45) of the Act. In the instant case, it is not disputed that the income of the trust was Rs. 73,484.06. Therefore, for the purpose of calculating the permissible limit of accumulation of income under section I 1 (1) of the Act, the Tribunal was not justified in deducting from that income the sum Rs. 17,414 received by the trust byway of rental income. For all these reasons, our answer to the question reframed by us, is in the negative and again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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