Law:

Section:

Section 61 of the I ncome-tax Act, 1961 - Transfer of assets - Revocable - By registered deed one G dedicated certain asset in favour of assesses, a temple, and continued to manage assets as sarvarakar of temple -G borrowed money from assessee at interest - o evidence on record to show that deed was ingenuine - Whether deed of endowment was valid according to law and not a revocable one - Held, on facts, yes - Whether any income of temple was assessable in hands of G - Held, on facts, no Facts By a registered deed, one G dedicated certain assets in favour of the assessee, a temple. In the account of G there was a khata of the temple and 8 per cent interest was credited in favour of the temple. The 1TO held that the assets of the assessee were assets of G and, consequently, the income of the assessee should be assessed in the hands of G. The Tribunal, however, held (i) that the endowment deed executed by G was valid; (ii) that the interest income of the temple should be taxed at the rate of 12 per cent; and (iii ) that the income made by G from the assets of the temple should be taxed in his hands. On reference, the revenue contended that the Tribunal had not considered that the deed was revocable or not and had, thus, not considered the applicability of section 61. Held It had never been the case of the department that the said deed was not genuine or sham. Further,, a perusal of deed of endowment would show that it was absolute and not revocable. No doubt, G continued to manage the properties of the temple, but that was in the capacity of sarvarakara as mentioned in the document. Thus, the deed of endowment was valid. There was nothing to show that any income of the temple was utilised by G, All that was shown was that G paid to the temple interest at the rate of 8 per cent and G should have paid interest at 12 per cent. As G paid interest at 8 per cent on the money borrowed from the temple, his taxable income in his assessment would be more as compared to what it would have been had he paid interest at 12 per cent and as such there was no question of taxing extra income in the hands of G. For the same reason, there was no justification for the view that…

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