NARAYANA CHANDRIKA TRUST Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THESE references cover the assessment years 1976-77, 1977-78, 1978-79 and 1979-80 with regard to the assessment of the petitioner-trust in the name and style of "Sree Narayana Chandrika Trust", Irinjalakuda, under the Wealth-tax Act, 1957. The question is of entitlement to the benefit of exemption under Section 5(1)(i) of the said Act and as a consequence benefit as a result thereof.

(2.) THE assessee-trust is created by a deed dated March 15, 1972, executed by one C.G. Kesavan Vaidyar, his wife and two sons. THE object of the trust was to provide education, medical relief and relief to the poor. This assessee-trust in its turn was a partner of the partnership firm in the name and style of "Beena Enterprises", Coimbatore, with 30 per cent. share, constituted under a deed of partnership dated April 1, 1972. THEre are three partners and six minors. THE minors are admitted to the benefits of the partnership only as under the law. THEre is no dispute that they are all relatives of the authors of the partnership-firm and the main source of income of the partnership firm of the trust is nothing but the share of profits received by the partners from Beena Enterprises, Coimbatore.

(3.) IN the further travel of the proceedings before the Appellate Tribunal, rightly importance was given to the expression "substantial investment" in Sections 13(2)(h) and 13(3)(e) of the Act. It was contended before the Tribunal that this is a matter of evidence and it must be with reference to the extent of shares held by the other partners in the firms, Beena Enterprises, Coimbatore, Chandrika Agencies, Bangalore, and Chandrika Enterprises, Irinjalakuda. It was emphasised that the assessee had 30 per cent., 20 per cent. and 35 per cent. shares, respectively, with reference to these partnership firms. Reliance was also placed on the provisions of Section 13, Explanation 3(ii) of the INcome-tax Act, 1961, to raise a contention that this Explanation, which is available under the statutory provisions of the INcome-tax Act, 1961, could not be read in wealth-tax proceedings. IN support of this contention, reliance was placed on the statutory provisions of Section 21A of the Wealth-tax Act, 1957, to contend that in the said statutory provision, there is reference only to Section 13(3) and not to Explanation 3 in any manner.