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TMI Blog1978 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ents ? 3. Whether, on the facts and in the circumstances of the case, the trust fund proportionate to the sum of Rs. 75,000 allocated under clauses 6 and 7 of the trust deed should be treated as held by the trustees on behalf of the beneficiaries specified in clauses 6 and 7 and assessed under section 21(4) of the Wealth-tax Act ? 4. Whether, on the facts and in the circumstances of the case, the corpus proportionate to the balance of income falling for consideration under clause 8 of the trust deed should be treated as held for charitable purposes and accordingly should be exempted under section 5(1) of the Wealth-tax Act ? Questions Nos. 1 and 3 are covered by the decision of this court in Trustees of Sahebzadas of Sarf-e-khas Trust v. CIT [1962] 44 ITR 332. Therefore, having regard to the view expressed therein, we answer these two questions against the assessee. Mr. Anjaneyulu, appearing for the assessee, made an oral application for a certificate of leave to the Supreme Court under s. 29 of the W.T. Act, hereinafter referred to as " the Act. " It is stated by him that the decision of this court in Trustees of Sahebzadas of Sarf-e-khas Trust v. CIT [1962] 44 ITR 332 is pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apart of a sum of Rs. 25,000 so that the trustees, in their absolute discretion, may pay monthly increased allowance to any of the dependents mentioned in the trust deed. Clause 8 enjoins on the trustees to utilise the balance of the income after meeting the liabilities contemplated under the aforesaid clauses to be spent for general charitable purposes and this clause reads as follows: " (1) for advancement of education preferably technical education by giving scholarships or fees or monetary help to poor and deserving students or by giving donations to any recognised institution or institutions or otherwise promoting education amongst the poor ; (ii) for giving free medicine and free medical aid to the poor and deserving ; (iii) for relief amongst the poor by giving monetary aid, food, clothing and the like preference being given in the absolute discretion of the trustees to the poor widows and orphans. (iv) for supporting and maintaining any charity that may be established or started by the settlor (v) for any other charitable object or objects for the benefit of the poor as the trustees may, in their absolute discretion, think fit, PROVIDED ALWAYS that notwithstandin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for promoting education amongst the poor. This sub-clause makes no distinction between one religion and another religion. The scholarships are to be given to all deserving poor students and for promoting education amongst the poor. The other object of the trust is to give free medicines and medical aid to the poor and deserving irrespective of one's religion, class, creed and caste. Similarly, provision is made for giving monetary aid to the poor by providing food and clothing. The widows and orphans are also included in this. The amount was also to be utilised for maintaining any charity which the settlor had earlier established. The trustees were also given absolute discretion to spend in any year not more than half of the net income for any charitable object or objects without reference to caste or community. So, it cannot be said that the property was not for a public purpose of a charitable nature. Our attention has not been invited by the revenue to any material to indicate even remotely that any part of the balance of the income derived from the trust fund was not utilised for the purposes in India. The learned counsel for the revenue, however, sought to invite our attenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery year for repairs and other works out of the income of Gulabhaghat (market). The amount to be spent on puja and repairs was to be the first charge on the income of the hat. It was, therefore held by the Patna High Court that the assessee had not created a trust or obligation on only property, but had only created a charge over part of the income accruing from a particular source and, therefore, he was not entitled to exemption on the amount spent. That case can have no application because, in this case, the balance of the income, as provided under the trust deed, was to be spent wholly for the purposes detailed in cl. 8 of the trust deed and, in fact, in the statement of the case, the Tribunal gave the figures regarding the net wealth determined in the assessment year for the years 1957-58, 1958-59 and 1959-60. The corpus proportionate to the total amount payable to the beneficiaries was also determined. Therefore, there is no merit in the contention of the revenue that the property was not held by the trustees under the trust. In Trustees of the Charity Fund v. CIT [1959] 36 ITR 513 (SC), a case where exemption was claimed under s. 4(3)(i) of the 1922 I.T. Act, the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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