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TMI Blog2011 (8) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 under a trust deed executed by Medical Relief Society of South Canara Manipal. The object of the Trust was to sponsor and provide educational facilities for catering courses, etc., On 6.8.1985 Kasthurba Medical College Trust executed a deed dated 6.8.1985 in favour of the assessee transferring both movable and, immovable property called "Valley View International Health Club". This property was valued at Rs. 43,37,832/- on the date of transfer. The said transfer was treated as a gift, in the hands of the donor Kasthurba Medical Collage Trust and brought to gift tax under the provisions of the Gift Tax Act. The Tribunal had set aside the levy of gift tax. Aggrieved by the same, the revenue preferred an appeal in WTA 30/2001. This Court co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0(22) of the Income Tax Act. The total wealth was computed at Rs. 43,38,830/- and accordingly the wealth tax liability was computed to be payable by the assessee at Rs. 59,340 as per the assessment order dated 22.3.1996. 5. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Wealth Tax, Mangalore. Relying on the finding recorded in the gift tax proceedings where it was held that, there is no gift at all, the Appellate Commissioner held there is no taxable net wealth in the hands of the assessee-trust and cancelled the assessment order. Aggrieved by the same, the revenue preferred an appeal to the Tribunal. 6. The Tribunal relying on the aforesaid judgment rendered under the Gift Tax held that the assessee- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the buildings, land, and the equipments, furniture and furnishings therein as aforesaid for establishing and running a college for providing catering education in Hotel & Restaurant Management and the Second Party has agreed for the same and accordingly the First Party has agreed to let the Second Party to hold the same on Trust..." Clause 2 of the above Deed of Declaration provides as under: "the Second Party will take proper care of, and maintain, the said land, buildings and the equipment furniture and furnishings therein and shall not transfer, mortgage or otherwise encumber or part with any interest in the same. Provided that, the Second Party, at all times, is liberty to add to and improve upon the existing buildings and struc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year 1986-87 for which the present wealth tax appeal (WTA 4/2005) has been preferred was completed under Section 143(1) of the Income Tax Act, accepting the return of income filed by the appellant, including its claim for exemption. Therefore, the stand taken by the assessing officer in the wealth tax proceedings is different from the view taken in the income tax proceedings. In the gift tax proceedings it has been categorically held that there is no gift as understood in law and what is transferred is only the right to enjoy the property. The exemption granted under Section 10(22) of the Income Tax Act continues to apply to the assessee even to this day. If the assessee is not liable to pay any income tax on the income derived ..... X X X X Extracts X X X X X X X X Extracts X X X X
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