9911796707
TMI Blog2004 (3) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... e charity was made (please see statement of income for 1992-93, and, hence, the assessee s wealth is not exempt under s. 5(1). 2.3 The CIT(A) failed to appreciate that the only activity carried on by the assessee during the previous years under consideration was the business of stevedoring as the assessee itself has submitted the same in the statement of income for asst. yr. 1992-93. 2.4 The CIT(A) failed to appreciate that apart from the above, there has been violation of s. 113(11)(d) r/w s. 11(5) of the Act and, therefore, the provisions of s. 21 A of the WT Act are clearly attracted to the assessee s case. 3. The brief facts of the case in appeal are that the assessee trust, created by a trust deed, was founded on the basis of a will executed by late Smt. Padmini Chandrasekharan on 11th Nov., 1972. It is admitted Smt. Padmini Chandrasekharan died on 7th June, 1980. By this trust, the settlor had transferred some immovable properties to the trustees with a direction that the income from the property should be used for charitable purposes. The settlor, Smt. Padmini Chandrasekharan, before her death, had devised certain property in favour of the trust. In her will, she appoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the observation of the AO holding that the trust was a private trust was not correct. He also gave a finding that factum valut had no application in the present case as the matter of testament was already sub-judice before the Hon ble High Court. However, CIT(A) gave a finding that the assets which formed part of the business assets of the assessee trust are to be included in the net wealth and accordingly, wealth-tax had to be charged. Aggrieved, the Department is in appeal before the Tribunal. 5. Before us, the learned Departmental Representative, Shri V.J. Vinayakumar, vehemently argued that the assessee-trust was only a private trust and it was not a charitable trust. This had been admitted by the assessee trust that there was no charitable purpose done during these years under consideration. He further argued that the assessee trust merely carried on business and that the trust was even not eligible for exemption under s. 11 of the IT Act in view of violation of s. 13(1)(bb) of the Act and he finally concluded that in view of this, exemption under s. 5(1)(i) was not available to the respondent-assessee trust and urged the bench to set aside the order of the learned CIT(A) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper book contains pp. 1-52. In the paper book of the assessee, it is seen that there is a last will and testament of late Smt. Padmini Chandrasekharan, which was executed on 30th Sept., 1975 and by cl. 4 of the said will, she intended to set up the present trust. The said clause of the will reproduced below, as it is: "The aforesaid properties shall form part of M/s H. Selvarajalou Chetty trust. It is my desire that after my life time, the following persons in whom I have great confidence shall be trustees: a. Thiru H B N Shetty, Registrar of Co-operative Societies, Madras, residing at No. 304 First Cross Street, Indira Nagar, Madras 600 020. b. Thiru R Krishnamurthy, Advocate, residing at No. 27 Masilamani Mudali Road, Balajinagar, Madras 14. c. Thiru N C Raghavachari, Advocate, residing at No. 5-A Sir VC Desikachari Road, Alwarpet, Madras-4. d. Thiru M. Ramachandran Chettiar, son of Manikkam Chettiar, residing at No. 114 Francis D Assis Street, Kurichikuppam, Pondichery." However, we have gone through the trust deed which was executed on 11th Nov., 1972 and we have gone through the objects of the trust which reads as under: "4. The object of trust (a) Educatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trust which is for any public purpose of charity in nature, grant of exemption under s. 5(1)(i) of the WT Act cannot be denied. Our specific attention was drawn to s. 5(1)(i). We have gone through provisions which are reproduced below: "(1) Subject to provisions of sub-s. (1A), wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee (i) any property held by him under trust or other legal obligation for any purpose of a charitable or religious nature in India: Provided that nothing contained in this clause shall apply to any property forming part of any business, not being a business referred to in cl. (a) or cl. (b) of sub-s. (4A) of s. 11 of the IT Act in respect of which separate books of account are maintained or a business carried on by an institution, fund or trust referred to in cl. (22) or cl. (22A) or cl. (23B) or cl. (23C) of s. 10 of that Act." In this provision of the WT Act, it is clear that wealth-tax shall not be payable in respect of asset held by the trust for purpose of charitable or religious nature. Sec. 5(1)(i) grants exemption in respect of property held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No further requirement is there in s. 5(1)(i). Nor any further requirement can be introduced in it by reference to s. 11 of the IT Act. It may be pertinent to mention that exemption given to charitable and religious institutions under the IT Act is hedged in by a number of restrictions and conditions including conditions regarding accumulation, etc., set out in sub-s. (2) of s. 11, "charitable purpose" has also been defined for the purposes of that Act in s. 2(15). The exemption has also been made subject to various conditions set out in s. 13. That is not the position under the WT Act. Consequently, even where the property held by an assessee under a trust or any other obligation for any public purpose of a charitable or religious nature in India is except from wealth-tax by virtue of s. 5(1)(i), still income from such properties might not be exempt under s. 11 of the IT Act, if it does not fulfil any of the requirements of that Act or if it falls within any of the restrictions or exceptions contained therein. The conditions for grant of exemption from wealth-tax under s. 5(1)(i) being wholly different and distinct, for the purpose of deciding the claim of an assessee for exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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