Law: Income Tax Act, 1961

Section: 19,16(i),57(i),256

Income-tax---Reference---Income---Trust---Assessment of trust---Income from other sources---Deductions---Trust deed providing for remuneration to trustees--­Decision of High Court for assessment years 1971-72 and 1972-73 that amount paid to trustees was diverted by overriding title and did not form part of income of trust and that 7-1/2 per cent of net income of trust was deductible as expenditure for administering trust under Ss.57(i) & 19(i)---No appeal by Revenue against decision of High Court---Question whether deductions allowable for assessment years 1981-82, 1982-83, 1983-84 and 1984-85---Question of fact---High Court was right in dismissing application to direct reference---Indian Income Tax Act, 1961, Ss. 19, 57 & 256. Held, that in CIT v. Trustees of H. E. H. The Nizam's Miscellaneous Trust (1986) 160 ITR 253 for the assessment years 1971-72 and 1972-73, the Andhra Pradesh High Court considered this question and stated as under: "in our opinion, 7-1/2 per cent. of the net receipts of the income of the trust after deducting from its total income the remuneration paid to the trustees constitutes reasonable expenditure for administering the trust under sections 57(i) and 19(i) of the Income Tax Act, 1961". This had not been appealed against by the Revenue. The same question regarding the deductions was raised for the assessment years 1981-82, 1982-83, 1983-84 and 1984-85. Following the in CIT v. Trustees of H.E.H. The Nizam's Miscellaneous Trust (1986) 160 ITR 253, the Tribunal dismissed the appeal filed by the Revenue. The Appellate Tribunal declined to refer the question to the High Court for its opinion. The High Court also dismissed the reference application filed by the Revenue under section 256(2) of the Act. From the question itself it would appear that it was more a question of fact than a question of law. Since the of the Andhra Pradesh High Court for the earlier years reported in CIT v. Trustees of H.E.H. The Nizam's Miscellaneous Trust (1986) 160 ITR 253 had not been appealed against by the Revenue, there was no ground to interfere with the of the High Court. CIT v. Trustees of H.E.H. The Nizam's Miscellaneous Trust (1986) 160 ITR 253…

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