Valid charitable trust deed over property held to exclude rental income from assessment in the assessee's hands.

A deed dated 26 September 1970 was treated as creating a valid trust over the property at 37/1, Jatindra Mohan Avenue, Calcutta. The recitals showed that the trustees had received substantial contributions from the settlors for acquisition of land, construction of a dharmashala and charitable dispensary, and application of the property's income to public, religious and charitable objects. On that basis, the monies were impressed with a trust and both the land and superstructure formed part of the trust estate. The property was therefore regarded as belonging to the charitable trust, with the result that the income from it was not assessable in the assessee's hands for the relevant assessment years.

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Issues: Whether the deed dated 26 September 1970 created a valid trust in respect of the property at 37/1, Jatindra Mohan Avenue, Calcutta, so that the income from that property was not assessable in the assessee's hands for the assessment years 1971-72 and 1972-73.

Analysis: The deed showed that the trustees had acknowledged receipt of substantial amounts from the settlors for acquisition of land, construction of a dharmashala and charitable dispensary, and application of the income of the property for public, religious and charitable purposes. It was further recorded that the land had been purchased, a house had been constructed, and the property was being used for charitable objects. On those recitals, the monies received were impressed with a trust and the land and superstructure belonged to the trust estate.

Conclusion: The trust was validly constituted, the property belonged to the charitable trust, and the income from the property was not assessable in the assessee's hands.

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