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TMI Blog1987 (6) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... known as Napoo Hall. This Napoo Hall was described as trust premises in clause 3(a) of the trust deed. In the clause, it was mentioned that the income, interest and profits of the trust premises and of the sum of Rs. 12,000 being a portion of the trust funds would be used for the maintenance and upkeep of the trust premises including the said Lakhamsey Napoo Hall and for ordinary and extraordinary repairs to the same and for improvement and betterment of the said trust premises. There is proviso to clause 3(a) in which it is mentioned as to what would happen if the income of the said Hall was insufficent for the above purpose. It is mentioned in said proviso that if the said income, interest, profits and rents were insufficient for any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(a) and 3(b) of the trust deed and that the surplus of the income, interest and profits of the said sum of Rs. 38,000 as may be left should be used for - (i) advancement and spread of education including providing scholarships or loans to students or grant to schools; (ii) relief and help to the poor and needy persons; (iii) medical relief including donations to hospitals and nursing homes; (iv) relief to famine stricken people and animals; (v) affording protection to cows and animals; (vi) promotion of religion, religious education, etc.; (vii) such other religious or charitable objects as the trustees might in their discretion think fit. 2. It would thus be seen that under the scheme laid down in the trust deed three different s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to clause 5 of the trust deed which was as follows : "And it is hereby further agreed and declared that the trustees shall be at liberty to receive contributions and donations either in money or in immovable property or in kind form any member or members of the public on such terms and conditions as the donors thereof and the Trustees for the purpose of investments to amalgamate such contributions or donations either with the corpus or the income, profits and interest of the trust premises or the Trust." He also referred to clause 8 of the trust deed which provided for amalgamation of trust funds and which was as follows : "And it is hereby further agreed and declared that notwithstanding anything to the contrary contained in these pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rment of the said premises. Consequently, the income from the Hall could not be used for charitable purposes mentioned in clauses 3(c) of the deed. The amount that could be spent on charitable purposes mentioned clause 3(c) of the deed, was the amount representing income from the sum of Rs. 38,000 which had been settled separately by the settlor. The submission of Shri Dastur, the learned representative for the assessee, on the other hand, is that since inthe trust deed there is provision for amalgamation of the trust fund, income could be spent on that income from the Hall need not be spent only for the maintenance of the Hall. In the alternative, he submitted that income from the Hall as such, was only Rs. 12,255 and expenses on the Hall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent carries with it the power to use the amalgamate fund for charitable purposes mentioned in the trust deed. It could not have been the intention of the settlor that the surplus arising form the giving of the Hall on hire should not be used for charitable purposes at all. Of course, the said income is in the first instance to be used for upkeep and improvement of the said premises. However, if there is a surplus, there is no prohibition against the same being used for charitable purposes mentioned in clause 3(c) of the trust deed. We have to read the entire trust deed as a whole. After considering all the relevant clauses, we agree with the learned Commissioner of Income-tax (Appeals) that there is no prohibition in the trust deed in regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) has not agreed with this view. We have perused the assessment order and also the order of the Commissiioner of Income-tax (Appeals). We have considered the submissions of the parties. We find ourselves in agreement with the view expressed by the learned Commissioner of Income-tax (Appeals). It is to be seen that the Hall was given to 547 different parties out of which 163 parties gave donations to the corpus, 230 parties gave general donations which were shown as income of the trust and 154 parties did not give any donation at all. From these figures, it is clear that those parties which gave corpus donations really intended to give the said donations towards corpus and that there was no intention to give those amounts as service char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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