2001 PLP 917 (PTD)
COMMISSIONER OF WEALTH TAX Versus KIKABI S EDUCATIONAL TRUST
| Citation | 2001 PLP 917 (PTD) |
| Forum / Court | 242 I T R 697 |
| Bench Members | R. Jayasimha Babu and Mrs. A. Subbulakshmy, JJ |
| Parties | COMMISSIONER OF WEALTH TAX Versus KIKABI S EDUCATIONAL TRUST |
| Primary Law | Wealth tax‑‑‑ |
Q1: What are the key laws and sections cited in 2001 PLP 917 (PTD)?
This judgment primarily cites: Wealth tax‑‑‑ as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2001 PLP 917 (PTD)?
The case was heard and decided by the 242 I T R 697 bench comprising: R. Jayasimha Babu and Mrs. A. Subbulakshmy, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2001 PLP 917 (PTD) (COMMISSIONER OF WEALTH TAX Versus KIKABI S EDUCATIONAL TRUST). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Headnotes / Summary
Charitable purposes‑‑‑Charitable trust‑‑‑Exemptions‑‑‑Denial of exemption where trust funds are diverted for benefit of persons mentioned in S.13‑‑‑Educational trust‑‑‑Trustees partners in firms‑‑‑Irrevocably assigning share income from firm to trust‑‑‑No infringement of S.13(2)(h) read with S.13(4) of Act‑‑‑Trust entitled to exemption from wealth tax‑‑‑Indian Income Tax Act, 1961, Ss. 11 &
13. The assessee was an educational trust and the trustees who happened to be partners of a firm assigned their share income irrevocably .to the trust. The Tribunal held that there was no infringement of the provisions of section 13(2)(h) of the Income Tax Act, 1961 read with section 13(4) of the Act. On a reference: Held, confirming the order of the Tribunal, that the assignment of the share income of the trustees to the trust would not result in any diversion of fund by the trust to the trustees. That the trust received income from a business was by itself not a ground to deny the benefit of section 10(22) of the Income Tax Act, 1961. The Tribunal was right in law in holding that the assessee was entitled to exemption from the levy of wealth tax for the assessment years 1973‑74 to 1981‑
82. Mrs. Chitra Venkataraman for the Commissioner. R. Meenakshisundaram for the Assessee.
Judgment & Decree
Held, confirming the order of the Tribunal, that the assignment of the share income of the trustees to the trust would not result in any diversion of fund by the trust to the trustees. That the trust received income from a business was by itself not a ground to deny the benefit of section 10(22) of the Income Tax Act, 1961. The Tribunal was right in law in holding that the assessee was entitled to exemption from the levy of wealth tax for the assessment years 1973‑74 to 1981‑
82. Mrs. Chitra Venkataraman for the Commissioner. R. Meenakshisundaram for the Assessee. R. JAYASIMHA BABU, J.‑‑‑We find no substance in these references. The Tribunal has held that there was no infringement of the provisions of section 13(2)(h) read with section 13(4) of the. Income Tax Act, 1961, on the basis of the materials placed before it. No error in the consideration of materials has been brought to our notice. The Tribunal has held that there was no diversion of the trust's fund by the trustees for the benefit of any person mentioned in section 13(2) of the Act. The assessee is admittedly an educational trust. The fact that the trustees happen to be partners of firms and that they had assigned to the trust irrevocably their share income to the trust would not result in any diversion of fund by the trust to the trustees. On the other hand, the income otherwise receivable by the trustees had the assignment not been effected, after the assignment is received by the trust. There is no question of diversion of the trust's funds for the benefit of the trustee. The Tribunal has also held so. Moreover; the amounts involved are relatively very small ranging from Rs. 728 to the maximum of Rs. 3,063 for' the assessment years 1973‑74 to 1981‑
82. That the trust receives income from a business is by itself not a ground to deny the benefit of section 10(22) of the Act. In the background of these facts we are satisfied that there are no errors on the part of the Tribunal in holding in favour of the assessee. The questions referred to us namely: "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that there was: no diversion of trust funds by the trustees for the benefit of any person mentioned in section 13(3) of the Income‑tax Act and that there was no infringement of the provisions of section 13(2)(h) read with section 13(4) of the Income Tax Act, 1961? and (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee was entitled to exemption from the levy of wealth tax for the assessment years 1973‑74 to 1981‑82?" Are answered in favour of the assessee against the Revenue. M.B.A./426/FC Reference answered.