9911796707
TMI Blog1983 (8) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... ohar were deductible as annual change. He also did not accept that the aforesaid expenses amounted to diversion of income by overriding title. Assessment was completed accordingly. 3. The assessee being, aggrieved came up in appeal before the ld. AAC. It was submitted on behalf of the assessee before the ld. AAC that the dedication of the properties to the deity had been made subject to payment of certain fixed annual liabilities and certain other annual expenses which by their very nature, could not be of any fixed amount and came within the definition of annual charge, under s. 27 of the Act. It was argued that any annual liability irrespective of its nature was allowable in computing the income from property under the head annual charge. It was also contended on behalf of the assessee that the dedication of the properties to the deity was conditional and that the deity was to be owner of the properties subject to the condition that the annual charges and the expenses for the maintenance of family deity/idols and Central Dharamshala specified u/cls (A) to (K) of cl 7 of the compromise Decree were met out. It was also contended that if any income went out before it came to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dudhuria vs. CIT (1933) 1 ITR 135 (PC) and of the Hon'ble Supreme Court in CIT vs. Siitaldas Tirathdas (1961) 41 ITR 367 (SC). 5. On the other hand, Shri K.K. Rai, the ld. departmental representative placed strong reliance on the orders of the Income-tax authorities. He submitted that the expenses in question did not constitute a charge and that there could be no overriding title in respect of an owner in the case of a property unless it was an annual charge. Reliance was also placed by him on the decision of the Hon'ble Delhi High Court in the case of S. Kartar Singh (of Nairobi) vs. CIT (1969) 73 ITR 438 (Del) of the Hon'ble Allahabad High Court in the case of CIT vs. Dr. P.N. Awasthi (1976) 105 ITR 320 (All) and of the Hon'ble Supreme Court in the case of CIT vs. Sri Jagannath Jew (through She baits) 1977 CTR (SC) 104 : (1977) 107 ITR 9 (SC). He also relied upon the Compromise Decree in support of the contentions raised by him. 6. We have considered the rival submissions as also the decisions referred to in their behalf. It is necessary to examine the case law referred to by the parties first. In the case of Raja Bejoy Singh Dudhuria, the Privy Counsel found that the sums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income from the property. In the case of Shri Jagannath Jew, the Hon'ble Supreme Court held on an interpretation of the Will that the directions therein did not divert the income at source but merely directed the She baits to apply the income received from the debutter properties for the specified purposes. Lastly, in the case of Rani Pritam Kunwar, the Hon'ble Allahabad High Court held that in order that a payment should be treated as a diversion at source, it was necessary that it should have been made under some legal obligation which must attach to the source of income. In other words, for such a payment, there should be an overriding charge, the change which is created under any law for time being in so far as by virtue of a Court's decree or by a voluntary settlement or the obligation must be such that though not made a specific charge on the property, it can be enforced in a Court of law. We have therefore, to examine the facts of this case to find out whether in terms of the Compromise Decree in question the obligation created amounted to a diversion at source or merely by way of application of the income. Sec. 24(1) (iv) provides that where the property is subject to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the rental income was provided to be utilised for meeting the expenses of the Central Dharamshala and charges specified from cl. A to K of cl. 7. Clauses 7 and 15 of the Compromise Decree are important, and/are reproduced below: "7. That, however, for the present the parties to this compromise have agreed that the part of the building No. 72/3 which was set apart for Dharamshala purposes shall (subject to the charge enumerated below) remain in possession an ownership of the family idols and will continue to be utilised as such and the rental income accruing from the Central Dharamshala building as well as from the properties Nos. 74/30 (only from the portion of premises in occupation of Messrs. Mathura Prasad Munnalal and Baburam Motilal but not that of portion of Prem Narain Har Narain and Chiranjilal Ram Narain) and 84/64 (half), 84/66(half) 84/67 at (half) G.T. Road, Kanpu, shall be utilised for meeting the expenses of the family Idols, Central Dharamshala and as well as for the payment of various charges as provided hereinafter: (A) Rs. 50 per annum shall be paid to Dosar Vaish Orphanage and Pathshala. (B) Rs. 50 per annum shall be paid to Shri Laxmi Narain Bhagwan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties namely premises Number 72/3 Central Dharamshala building, 74/30 (only the portion of premises in occupation of M/s. Mathura Prasad Munnalal, Babu Ram Motilal) and Number 84/64 (half), 84/67 (half), 84/66 (half) at G.T. Road, Kanpur, is dedicated and shall always remain vested in the aforesaid idols. 15. That as provided above the total properties now dedicated (subject to the charge mentioned above) to the family idols Shri Ram Lakshaman Janki Ji, of which reference has been made before will be: 1. 72/3 Central Dharamshala building, Kanpur. 2. 74/30 (only the portion in occupation of M/s Mathura Prasad Munnalal and Baburam Motilal, Collectorganj, Kanpur. 3. 84/65 84/66 Half G.T. Road, Kanpur. 84/67 4. Grove and well at Village Babhna District Unnao." It will be clear from the above that a part of the building No. 72/3 which was set apart for Dharamshala purposes was to remain in the possession and ownership of the family idols subject to the charge specified in cl. 7. It is also clear from the above that the rental income accruing from the Central Dharamshala building as well as from the property No. 74/30, 84/64 (half), 84/66 (half), 84/67 (half) at G. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
