Law:

Section:

Section 11 of the Income-tax Act, 1961 [Corresponding to section 4(3)(i) of the Indian Income-tax Act, 1922] - Charitable or religious trust- Exemption of income from property held under - Whether if one of objects of trust deed is not of religious or charitable nature and trust deed confers full discretion on trustees to spend trust funds for an object other than of religious or charitable nature, exemption under section 4(3)(i) of 1922 Act would not available to said trust - Held, yes - Appellant trust was created for religious and charitable purpose - For purpose of carrying out said religious and charitable objects, trust deed empowered trustees to establish any business, undertaking or industry - Income-tax authorities found that said industrial and commercial concerns were not started in furtherance of objects of trust but for purpose of earning profits which were to be distributed to shareholders who had invested share money in those concerns - Whether on facts, appellant was not entitled to exemption under section 4(3)(i) of 1922 Act - Held, yes FACTS The appellant trust was created for religious and charitable purposes. For the purposes of carrying out the said religious or charitable objects, the trust deed empowered the trustees to establish any business, undertaking or industry and to purchase, acquire or undertaking the whole or any part of property and liabilities of any person, firm or company. The appellant contended that the income derived from such commercial concern was to be spent wholly for the religious and charitable purposes and, therefore, exemption under section 4(3)(i) of the 1922 Act was permissible. The revenue denied the claim for exemption on the ground that some objects were non-charitable and the trustees were given an unfettered discretion with regard to the utilisation of the income. The revenue also held that the appellant trust was not a genuine charitable trust but its creation and existence were a camouflage and were meant only as a device for the benefit of the settlor and the industrial and the industrial and commercial concerns controlled by him. On reference, the High Court held that the appellant was not entitled to…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492