1967 (3) TMI 18

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....me of the said charity fund shall be administered and their income to be utilised by the trustees appointed hereunder as per the provisions contained in this deed. (12) From the incomes realised from 'B' and 'C' schedule properties, the amount should be spent in the first instance, for the maintenance and improvements of such property, for payment of land revenue pattam, municipal tax, etc., for purchase of account-books, stationery, salary, printing charges, etc., and the remaining shall be divided into 4 equal parts and expended in the manner hereinafter described. (13) (a) One share of the 4 parts referred to above should be utilised for effecting improvement to any of the existing buildings and for putting up new buildings for bei....

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.... Officer referred to the 2/8th share directed to be applied for repairs and improvement in clause 13(a) of the deed, and by the 1/8th share the share directed to be applied for the same purpose in clause 13(b). The decision of the Income-tax Officer was confirmed by the Appellate Assistant Commissioner. The Tribunal reversed the order of the Appellate Assistant Commissioner. The Tribunal observed that section 4(3)(i) of the Income-tax Act, 1922, " does not set its face against accumulations of the income being invested and the income therefrom used for trust purposes and that a trust does not cease to be a public charitable trust merely because the beneficiaries of the trust are poor descendants of the settlor. The Income-tax Commissi....

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....t erred in failing to direct that a statement of case in so far as it related to the 1/8th share of the income of properties in schedules B and C be submitted. Mr. Shaukat Hussain on behalf of the trustees has invited our attention to the judgment of the High Court dated 31st July, 1964, on the question referred by the Tribunal in so far as it relates to the 2/8th share of the income from properties in schedules B and C. It appears from a copy of the judgment of the High Court produced before us that in their view the investments in property were meant to augment the assets of the trust for the benefit of charities mentioned in the deed of trust and they were no more than accumulations for application to the charitable purposes within th....