1979 (10) TMI 101 - AT - Income Tax

Summary

Issues:
1. Whether the provisions of s. 144B are applicable to the assessment for the asst. yr. 1974-75.
2. Whether the sum of Rs. 1,30,000 received by the assessee trust should be included in the total income as per s. 12.

Detailed Analysis:
1. The judgment involves an appeal and a cross objection related to the same assessment for the asst. yr. 1974-75. The main issue is whether the provisions of s. 144B are applicable to the assessment for this year. The assessee contended that the assessment was barred by the period of limitation as s. 144B, introduced in 1976, was not applicable to the assessment year in question. However, the Tribunal held that procedural provisions like s. 144B have retrospective operation on pending matters, rejecting the assessee's contention and allowing the assessment to proceed.

2. The second issue pertains to whether a sum of Rs. 1,30,000 received by the assessee trust should be included in the total income under s. 12. The Department argued that since the trust incurred expenditure without any resources other than the contributions received, the contributions did not form part of the trust corpus. However, the Tribunal found that there were no entries or material showing the expenditure was drawn from the trust fund, concluding that the contributions indeed formed part of the trust corpus. The Tribunal relied on the exception in s. 12 for contributions made with a specific direction to form part of the corpus, ultimately ruling in favor of the assessee.

3. The judgment also mentions that the assessee's representative referenced a previous order of the Tribunal to support the argument that even if there was a breach of trust in incurring expenditure from the trust fund, the case would still fall within the exception mentioned in s. 12. The Department did not present a specific argument on this point, and the Tribunal accepted the assessee's contention based on the referenced order.

4. Ultimately, after considering all relevant facts, submissions, and orders, the Tribunal dismissed both the Department's appeal and the assessee's cross objection. The judgment provides a detailed analysis of the issues raised during the assessment proceedings and the arguments presented by both sides, culminating in the Tribunal's decision to uphold the assessee's position regarding the treatment of the contributions received by the trust.