9911796707
TMI Blog1967 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant previous year being the year ended March 31, 1960. Sardar Ajaib Singh, who is himself a trustee of the assessee trust, offered to transfer 640 fully paid-up shares in Indra Singh and Sons Private Ltd., of the face value of Rs. 6,40,000 to the assessee trust, reserving to himself the right to revoke or recall the transfer of either the entire lot of 640 shares or a portion thereof, but not until the expiry of clear seven years from the date of the delivery of the instruments of transfer and the certificates of share to the assessee trust. The offer is contained in his letter, dated January 23, 1959. The trustees accepted the offer on the terms the same had been made, and ratified the same by two resolutions dated February 5, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee were urged by the revenue before the Tribunal. The Tribunal rejected the contentions being of the opinion, (i) that the assessee being a public charitable trust was not limited in its scope of activities within the four corners of the trust deed, under which it had been created, and was entitled as of right to receive gifts and donations from the public, and (ii) that the revenue being a third party to the transaction was not entitled to agitate the issue regarding the validity or otherwise of the gift. The Tribunal found that the donor had made the offer on certain conditions and the donee accepted the offer on those conditions. The gift was, therefore, valid and complete. Since, under the gift, the assessee became the rightful owner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by subsequent gifts. He, however, submitted that the same analogy should not be applied to the instant case, because a Hindu deity was a juristic personality and was at liberty to receive gifts ; a trust was not such a personality and was not, where there was no authorisation in the trust deed, entitled to receive gifts and donations from the public and augment the original trust thereby. Mr. Mukherji, lastly, submitted that the endowment made by Sardar Ajaib Singh may form a fresh and a separate trust in the hands of the trustees of the assessee trust. The same trustees, as trustees of the trust created by Ajaib Singh, may claim exemption from taxation under section 4(3)(i) of the Indian Income-tax Act. He, however, strongly disputed their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee-trust, it was not necessary for him to do so by a deed. In order to judge the validity of the gift, it may not be necessary to establish that the trustees signified their assent to accept the gift. In this case, however, there is enough evidence that the trustees signified their assent to accept the offer of gift on the terms proposed by the donor. The question for our consideration, however, is whether the gift, as accepted by the trustees, had the effect of augmenting the assessee-trust for taxation purposes, or whether the effect of it was that it remained a separate trust in the hands of the trustees of the assessee-trust, with liberty to them to apply the income of the subsequent trust for the benefit of the assessee-trust. Mr. Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question arose whether even after the gift of the 640 shares by Ajaib Singh to the assessee-trust the shares remained part of the wealth of the assessee, for the purpose of computation of wealth-tax, or stood transferred to somebody else. We answered the question in favour of the assessee because we had no ground to question the gift itself. Mr. Banerjee submitted that, since the gift was upheld, we should hold that the gift was in favour of the assessee-trust and went to augment the same, because that must be the effect of the judgment in the wealth-tax reference case. We are unable to uphold this argument. It did not come up for our consideration whether the gift by Sardar Ajaib Singh had the effect of augmenting the assessee-trust or h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
