Commissioner Of Income-Tax vs Raghubir Saran Charitable Trust
1990 Latest Caselaw 19 Del

JUDGMENT

Kirpal, J.

1. The petitioner seeks reference of the following two questions of law to this court:

"(1) Whether, on the facts and in the circumstances of the case, the Hon'ble Income-tax Appellate Tribunal was justified in deleting the addition made on account of difference in market rent and rent actually paid in respect of property at 19, Tuglak Road, New Delhi?

(2) Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the trust by allowing the trust property to be used by the trustees did not infringe the provisions of section 13 and thereby entitle it to exemption under section 11 of the Income-tax Act?

2. It appears that the respondent is the owner of a house No. 19, Tuglak Road, New Delhi. Two of the trustees are living in the said house. The Income-tax Officer computed the market rent of the said house and added the difference between the market rent so calculated and the rent which was being actually paid in the hands of the respondent. The matter went up in appeal but was decided against the respondent who then filed a second appeal before the Tribunal. The Tribunal, following the decisions of the Supreme Court in Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee [1980] 122 ITR 700, Mrs., Sheila Kaushish v. CIT and Amolak Ram Khosla v. CIT [1981] 131 ITR 589, came to the conclusion that the market rent could not be more than the standard rent. It further held that as the rent which was being actually paid was more than the standard rent, the question of there being any addition did not arise. In our opinion, question No. 1 which is proposed by the Department is purely academic as it is covered by the aforesaid decisions of the Supreme Court.

3. As regards question No. 2, the Tribunal held that the provisions of section 13 are not applicable. The Tribunal held that the respondent was entitled to the exemption under section 11. In our opinion, the question involved is a mixed question of fact and law as it involves the interpretation of section 13(1)(c)(ii) in addition to section 13(2)(b) of the Act, on which counsel for the petitioner is relying.

4. We, therefore, direct the Tribunal to state the case land refer to this court the following question of law:

"Whether the Tribunal was justified in holding that the trust was entitled to exemption under section 11 of the Income-tax Act?"

4. The petition is disposed of accordingly. No costs.