1981 (8) TMI 120

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....cision of the CIT(A) that "the dominant object of the Trust being to carry on business and the trustees having unfettered discretion to apply the income of the Trust otherwise than for charitable purposes, no part of the income can be said to be exempt and the entire income will be liable to tax". "(2) Whether on the facts and in the circumstances of the case, the ld. Tribunal erred in not holding that the assessee Trust is not a charitable trust under s. 2(15) of the IT Act, 1961 and that its income is not exempt from tax." 2. As, in our opinion, no question of law arises from said combined order of the Tribunal, we refuse to draw up a statement of the case and refer the said questions to the Hon'ble High Court. 3. The brief facts are t....

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....s the Trustees in their absolute discretion think fit, that is to say, the relief of the poor, education, medical relief and the advancement or any other object of general public utility not involving the carrying on of any activity for profit". During the years under appeal, the assessee trust received the income as follows: Assessment years . 1973-74 1974-75 1976-77 Share of profit from partnership firms 18,59,371 4,84,712 8,20,227 Selling agency commission 10,406 16,212 33,03,360 Interest income 8,57,717 53,342 8,81,994 Dividend 15,000 27,000 . Surplus from income and expenditure a/c. . 7,88,060 . Total 27,42,494 13,69,326 50,05,581 Expenses 14,436 13,840 87,578 Total Income Rs. 27,28,058 13,55,486 ....

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....he net income, if any, of such business was to be utilised by the assessee for the heads, specified in s. 2(15) of the Act, 1961. He, therefore, observes that in the case of the assessee the charity comes into picture only if there is net income from the trust property. He also observes that the trust's net income will be utilised for a charitable purpose without indicating any specific item of charity. On the facts of the case, the CIT (A) took the view that the power to carry on the business was not subservient to the main objects of the trust, but it was rather a dominant object of the trust. In the following paragraphs, he gave other reasons also to disqualify the trust from claiming exemption, but the main objection of the CIT (A) is c....