TaxTMI 
TaxTMI 
1971 (1) TMI 27
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....he matter relates to the assessment years 1956-57, 1957-58, 1958-59, 1959-60 and 1960-61, the relevant accounting years for which ended on March 31, 1956, March 31, 1957 March 31, 1958, March 31, 1959 and March 31, 1960. The assessee filed applications claiming refund of Rs. 2,470.56, Rs. 3,339.28, Rs, 4,418.31, Rs. 9,297.47 and Rs. 3,231 in respect of the above-mentioned years. According to the assessee, the dividend income in respect of which he claimed refund was exempt under the provisions of section 4(3) of the Indian Income-tax Act, 1922 (hereinafter referred to as " the Act "), as the assessee was a validly created trust. The case of the assessee was that Ramkrishna Dalmia created a trust in the sum of Rs. 5 lakhs on March 31, 195....
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....rely, Sd. R. Dalmia. Pursuant to the above letter four amounts aggregating to Rs. 60,000 were paid by the Bharat Union Agencies Ltd. to the assessee in the following manner : Rs. 34,000 ... on September 29, 1953 Rs. 11,000 ... on January 16, 1954 Rs. 5,000 ... on February 10, 1954 Rs. 10,000 ... on June 22, 1954 Out of the above amount of Rs. 60,000, Rs. 34,000 were invested by the assessee in the shares of Bharat Nidhi Ltd., Rs. 11,000 and Rs. 5,000 were invested in the shares of Bharat Collieries Ltd., and the balance of Rs. 10,000 was invested in the shares of the Punjab National Bank Ltd., in the assessee's name. The assessee got dividends in respect of the said shares and made claim for refund on account of the div....
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....Ltd., in pursuance of the letter dated March 31, 1952, of Ramkrishna Dalmia. The above payment, in pursuance of the letter, in the opinion of the Tribunal established the formation of the trust in regard to the sum of Rs. 60,000. Since the trust was for charitable objects like establishment of medical and religious institutions or " such similar philanthropic objects ", the Tribunal held that the objects were clear and not vague. The contention that the use of words " such similar philanthropic objects introduced an element of vagueness was rejected. The assessee was, accordingly, held to be entitled to the refund of the tax deemed to have been deducted at source in regard to the dividend income which arose, out of the investment of the sum....
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....uch similar philanthropic object ". In pursuance of the intention, as made manifest by that letter a sum of Rs. 60,000 was paid and the same was invested in the name of the assessee in various companies. It can, therefore, be said that an intention to create a charitable trust was made manifest and there was a formal divesting in favour of the assessee of the ownership of the amount of Rs. 60,000. The fact that only Rs. 60,000 out of the amount of Rs. 5 lakhs mentioned in the letter were passed on to the assessee would not in any way affect the creation of a valid trust. The trust might as well be in respect of a smaller amount, even though the donor had earlier intended to make a gift for the purposes of the trust of a larger amount. Th....