9911796707
TMI Blog1987 (1) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... set out in the statement of the case are that one T. Bapanaiah, a resident of Vijayawada constituted a trust of a sum of Rs. 20,000 for charitable purpose by written indenture dated October 22, 1965, and the said sum was invested in a partnership firm, " M/s. Jaya Textiles ", Vijayawada, in which the assessee has substantial interest. Then he claimed exemption of interest derived from the trust property under section II of the Act from taxability for three assessment years, 1972-73 to 1974-75. The Income-tax Officer applied section 13(2)(h) of the Act and held that it is to be included in the income of the assessee. On appeal, the Appellate Assistant Commissioner and, in further appeal to the Tribunal, the view of the Income-tax Officer was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. of the income from such property; " (Clause (b) thereof is not necessary for the purposes of this case and is, therefore, omitted). Sub-section (2) thereof provides thus: " Where seventy-five per cent. of the income referred to in clause (a) ...... of sub-section (1) read with the Explanation to that sub-section is not applied, or is not deemed to have been applied, to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided the following conditions are complied with, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the previous year of the person in receipt thereof (a) any part of the income from the property held under a trust for private religious purposes which does not enure for the benefit of the public; ...... (c) in the case of a trust for charitable or religious Purposes or charitable or religious institution, any income thereof (i) ...... (Not relevant, hence omitted), (ii) if any part of such income or any property of the trust or institution (whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in subsection (3). (Clause (d) is not necessary for the purpose of this case and is, therefore, omitted). Sub-section (3) thereof reads thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such concern." A conjoint reading of these provisions would make the legislative intention manifest that the income derived from property held wholly for charitable purposes to the extent to which such income is applied to such purposes in India and where such income is accumulated or set apart for application to such purposes in India to the extent to which such income so accumulated or set apart is not in excess of twenty-five per cent. of the income from such property, shall not be included in the total income of the previous year of the person in respect of the income from such property. Under section 11(2), the remaining seventy-five per cent. where it is accumulated or set apart either in whole or in part for charitable or religio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or any property of such trust or institution is used or applied directly or indirectly for the benefit of any person referred to in sub-section (3), namely, the author of the trust or the founder of the institution if any funds of the trust or the institution are, or continue to remain, invested for any period during the previous year in any concern in which the founder or the author has substantial interest. Sub-section (2) of section 13 of the Act makes the matter explicit. It speaks that without prejudice to the generality of the provisions of clause (c), the income or the property of the trust or institution or any part of such income or the property so invested shall not be excluded. Admittedly, the author of the trust has inve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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