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<h1>Court excludes property income settled for college from assessee's total income under Income-tax Act, 1961</h1> The court interpreted the Income-tax Act, 1961 concerning property income and determined that the income from a property, settled in favor of a college ... Income Issues:1. Interpretation of Income-tax Act, 1961 regarding property income.2. Determination of ownership of property income.3. Validity of settlement of income in favor of a college.Analysis:1. The court was tasked with interpreting the Income-tax Act, 1961 concerning property income. The question referred was whether the Tribunal was legally correct in deleting the property income of Rs. 60,185 for the assessment year 1970-71 and holding that it belonged to a college. The Tribunal confirmed the Appellate Assistant Commissioner's conclusion that the income should not be included in the assessee's total income.2. The factual position revealed that the assessee acquired a property in New Delhi and let it out to a company. The Sanatan Dharam Sabha, a college, was facing financial difficulties and approached the assessee for assistance. The board of directors authorized settling the income from the property for the benefit of the college, and resolutions were adopted to irrevocably transfer the rental income and establish the property as an endowment fund for the college. Despite the Revenue's argument that a distinction should be made between settling income and divesting property, the court found that the intention was to divest both the property and its income, as evidenced by the recorded material.3. The court, after hearing the Revenue's counsel and noting the absence of the assessee, concluded that the Tribunal's decision aligns with the intention to divest both the property and its income. Consequently, the court answered the question in the affirmative, in favor of the assessee and against the Revenue. The reference was disposed of accordingly, affirming the Tribunal's decision regarding the ownership and settlement of property income for the college's benefit.
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