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TMI Blog1998 (2) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... ? 2. Whether the provisions of section 13(1)(bb) are inapplicable in respect of business which itself is the property held under trust ? 3. Whether, on the facts and in the circumstances of the case, the interest on investment of surplus fund could be assessed under the head "Business" ? 4. Whether, on the facts and in the circumstances of the case, when the assessee's counsel gave up ground No. 2 the Tribunal is justified in considering the ground on merits on the basis that "there is no estoppel against law" and is not the above consideration based on the principle of estoppel wrong since the principle is available only to the parties to the dispute ?" We take up questions Nos. 1 and 2 first for consideration. The assessee a pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , no exemption can be granted under section 11." The assessee then carried the dispute in appeal to the Commissioner of Income-tax (Appeals), who held that after the insertion of section 13(1)(bb) in the Income-tax Act, with effect from April 1, 1977, the decision of the Supreme Court in Dharmadeepti v. CIT [1978] 114 ITR 454, in the case of the assessee itself would not be applicable and exemption under section 11 could not be claimed on the strength of that decision by the assessee. Thereupon, the assessee went up in appeal to the Income-tax Appellate Tribunal which disposed of the appeal relating to the consecutive assessment years 1982-83 to 1984-85 by a common order dated December 2, 1993. The Appellate Tribunal, notwithstanding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other educational purposes. In the course of assessment for the years 1979-80 to 1983-84, the respondent raised the objection regarding the claim of exemption under section 11 of the Act on the ground that by virtue of section 13(1)(bb) of the Act the trust is not entitled to claim exemption. The Madras High Court held that the founder of the trust has clearly evinced an intention to create a public charitable trust as seen from the preamble and clause of the original trust deed and the charitable objects referred to in the supplementary deed have to be fulfilled from and out of the income from the business which is directed to be held under trust. It was held that it is to carry out and fulfil those objects, the business is being carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sources". The Assessing Officer rejected that contention and brought to tax interest income under the head "Business income". The standing counsel made a feeble attempt before us to canvass the view taken by the Assessing Officer in this behalf. The Appellate Tribunal held as under : "We have also gone through the list of fixed deposits made under surplus funds since 1972. Barring income from those deposits which are invested as deposit under section 15 of the Chitties Act, the income from other deposits cannot be considered as income from business as such deposits have come into the surplus funds of the trust by means of accumulation over the years. Hence, the interest income from non-business deposits can be taxed under other sources ..... X X X X Extracts X X X X X X X X Extracts X X X X
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