9911796707
TMI Blog1997 (8) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... was given to the assessee trust through the executor of the will of late K. Narayana Setty, the founder and one of the ex-trustees of the trust. The executor was Sri K.N. Jayaprakash, another trustee of the assessee trust. 2. In the assessment order, the AO has quoted from para 7 at page 3 of the will of late Narayana Setty. The said will stated as below: "I hereby devise and bequeath my balances standing to the credit of my capital account and current account in the books of the firm M/s. Mahalakshmi Flour Mills arrived at after paying off all the debts and liabilities on the date of death owing from me to any other person and after bequeath the amounts as mentioned in para.6, in favour of K. Narayana Setty Ramarathnamma Trust." 3. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned counsel for the assessee has pointed out that the trust issued a receipt in respect of the amount having been donated to it towards its corpus by the executor of the will of late Narayana Setty. It is also pointed out that the entire donation amount received by the trust during this year was towards its corpus. It is argued by the learned counsel for the assessee that the will takes effect after the death and hence, the deceased himself cannot be the doner of the amounts bequeathed under the will. It has also been pointed out that the executor, in making the donation towards the corpus of the trust, did not violate the provisions of the will. Referring to the purpose for which the trust has been created, it has been stated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the trust. While making the said donation, he added that the donation should be treated as towards the corpus of the trust. In doing so, it cannot be said that he violated the wishes or the directions of the testator in any way. The will had given powers to him in an implied manner, to make the donation to the trust in any manner he liked. By making the donation towards the corpus of the trust, he exercises his powers in a particular manner only, which was not at all repugnant to the provisions of the will. Hence, we are not in a position to agree with the departmental contention that by making the donation to the corpus of the trust, the executor violated the provisions of the will. The executor also acted merely in his fiduciary c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose and the subsequent behaviors of the executor of the will as well as the trustees of the trust, it would appear that the intention of the testator, though not clearly expressed in the will must have been towards donating the amount towards the corpus of the trust. In any case, so far as the trust is concerned, the donation was received by it from the executor, who clearly specified the donation to be towards the corpus of the trust. Taking into consideration all these facts and factors, we are of the opinion that no objection can be taken to the claim of the assessee that the donation was actually made towards the corpus of the trust alone. We, therefore, reverse the decisions of the lower authorities and direct the AO to treat the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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