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Issues:
1. Whether the trust created under an interim award for the preservation of temples and a High School qualifies for exemption under section 11 of the Income-tax Act, 1961? 2. Whether the temples under the trust are private temples for private purposes or public temples for the benefit of the public? Analysis: 1. The trust was created under an interim award in a partition suit for the preservation of temples and a High School. The appellant claimed exemption under section 11 of the Income-tax Act, stating the trust was engaged in public religious activities. However, the assessing authority rejected the claim, deeming the trust as a private family trust. The High Court examined the provisions of the interim award and concluded that the trust was indeed a private family trust. The court noted that the trust's purpose was to maintain the temples and the High School for the benefit of the Kovilakam family members, not the public. Despite public participation in temple functions, the trust's character remained private, as per the scheme's provisions. The court dismissed the appeal, emphasizing the trust's private nature based on the trust deed's explicit terms. 2. The second issue raised was whether the temples under the trust were private or public, affecting the tax exemption eligibility. The appellant argued that public participation in temple activities indicated a public nature. However, the court found that the trust's core purpose was to benefit the Kovilakam family members, not the public. Even though one temple was declared public under a specific act, it did not alter the trust's overall private nature. The court emphasized that the trust's operations, including festival conduct, were restricted to Kovilakam family members, reinforcing its private character. Citing Supreme Court distinctions between public and private trusts, the court upheld the lower authorities' decision, dismissing the appeal based on the trust's private nature and ineligibility for section 11 exemption.
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