HAKMUDDIN MULLA HASANBHAI SINGAPOREWALA CHARITABLE TRUST v. FIFTH INCOME TAX OFFICER
[Citation -1985-LL-0416-2]

Citation 1985-LL-0416-2
Appellant Name HAKMUDDIN MULLA HASANBHAI SINGAPOREWALA CHARITABLE TRUST
Respondent Name FIFTH INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 16/04/1985
Assessment Year 1979-80
Judgment View Judgment
Keyword Tags benefit of exemption • specific direction • trust deed • trust fund
Bot Summary: The Departmental authorities had held that there was no specific direction letters from the donors that the donations shall form part of the corpus of the trust. Counsel for the appellant, pointed out that the donors were persons based in Singapore, and that in their letters they had specifically stated that the donations made by them wee towards the corpus of the trust. He pointed out that according to this clause, whatever donations were received by the Matavallis shall be deemed to be accretions to the trust and shall be held upon the same trust and subject to the same powers and provisions as are declared in the Waqf Deed. The donations received by the Mutavallis shall be deemed to be accretions to the Trust and shall be held upon the same trust and subject to the same powers and provisions as are herein declared and contained. Emphasised iticilized in print, supplied) In accordance with this clause in the trust deed, the trustees have kept these donations as part of the corpus of the trust of the trust fund, on the objects of the trust declared in the deed of trust. Clause 8 imposes an obligation on the trustees to hold such donations as part of the corpus of the trust and not fritter them away. 7 to 9 of the paper-book are to be eschewed for the reason that they were not produced before the Departmental authorities, it is clear that these donations have been received only towards the corpus of the trust and held by the trustees as forming part of the trust corpus.


dispute in this appeal is whether Departmental authorities were justified in denying exemption to donations of Rs. 33,000 received by appellant under s. 12 of Act. Departmental authorities had held that there was no specific direction letters from donors that donations shall form part of corpus of trust. Shri V.H. Patil, ld. counsel for appellant, pointed out that donors were persons based in Singapore, and that in their letters they had specifically stated that donations made by them wee towards corpus of trust. However, he fairly conceded that three years appearing at pp. 7 to 9 of paper book were not placed before Departmental authorities. Shri V.H. Patil, however, argued that even if these letters were not there assessee would be entitled to succeeded on basis of cl. 8 of indenture of Waqf dt .30th April, 1969. He pointed out that according to this clause, whatever donations were received by Matavallis shall be deemed to be accretions to trust and shall be held upon same trust and subject to same powers and provisions as are declared in Waqf Deed. He further invited our attention to balance-sheet of assessee-trust at p. 12 of paper book as on 31st Dec., 1978. According to this balance- sheet, entire donations of Rs. 33,000 has been added to trust fund or corpus to form part of total fund or corpus of Rs. 1,13,000. He therefore, submitted that conditions of s. 12 were satisfied and that Departmental authorities were not justified in taxing sum of Rs. 33,000 as income in hands of appellant. On behalf of Revenue, Shri Prem Kumar, ld. Departmental Representative, relied on order of Departmental authorities and contended that amount of Rs. 33,000 was rightly brought to charge in hands of appellant. On careful consideration of submissions urged above, we feel that appellant is entitled to succeed in its appeal. Clause 8 of indenture of Waqf Deed dt. 30th April, 1969 reads as follows: "It shall be lawful for Mutavallis to accept donations from Waqf and/or members of public for object of Waqf hereby created. donations received by Mutavallis shall be deemed to be accretions to Trust and shall be held upon same trust and subject to same powers and provisions as are herein declared and contained.:" [Emphasised iticilized in print, supplied) In accordance with this clause in trust deed, trustees have kept these donations as part of corpus of trust of trust fund, on objects of trust declared in deed of trust. Clause 8 imposes obligation on trustees to hold such donations as part of corpus of trust and not fritter them away. So even if letters of to donors containing their specific directions at pp. 7 to 9 of paper-book are to be eschewed for reason that they were not produced before Departmental authorities, it is clear that these donations have been received only towards corpus of trust and held by trustees as forming part of trust corpus. assessee is, therefore, entitled to benefit of exemption under s. 12 of Act. Accordingly addition of Rs. 33,000 to income of appellant is deleted. appeal is allowed. *** HAKMUDDIN MULLA HASANBHAI SINGAPOREWALA CHARITABLE TRUST v. FIFTH INCOME TAX OFFICER
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