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TMI Blog1981 (1) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and in the circumstances of the case, in the event of question No. 1 being answered affirmatively, whether the proviso (b) of s. 4(3)(i) was applicable to this case so as to render the income earned by the trust assessable to tax ? The reference arises out of assessments for the assessment years 1954-55, 1955-56 and 1956-57. The accounting years relevant for the years ended oil Diwali of Samvat Years 2009, 2010 and 2011. The assessee is an association of persons consisting of trustees appointed under a deed of trust dated September 1, 1952, executed by one Shri Beharilal Jhunjhunwala. In as much as the factum and validity of the trust is not disputed and the points are based on the construction of the recitals of the trust deed, it wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a net profit of Rs. 47,133-2-3, which included a sum of Rs. 686-10-6 as interest on advances made to various parties in the course of the business. For the subsequent accounting years, relevant to the assessment years 1955-56 and 1956-57, the assessee did not derive any income from the execution of any mining contracts, but the funds available with the trustees were utilised for giving loans to several parties. Certain income was derived from such loans during those years. Before the ITO reliance was placed on behalf of the assessee on s. 4(3)(1) of the I.T. Act, 1922, and exemption was claimed on that basis. The ITO however arrived at a conclusion that the business itself was not held in trust and, consequently, exemption could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered companies or to invest their funds in deposits with banks, Government securities, or in the purchase or mortgage of any property movable or immovable or any trust security or in any shares, stocks and debentures or any other security, or with businessmen of repute, on suitable conditions, or to raise or borrow money from banks or other individuals or firms, whenever necessary and to use the properties owned by the trust in business of the trust or let out to others or to take mining lease or contracts for working mines or any other work connected with the working-of the mines and carry on such other trade and industries as will be found proper and expedient for increasing the properties of the trust, and its income and that all such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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