COMMISSIONER OF WEALTH TAX Vs. P KRISHNA WARRIER

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal referred the following question relating to the consecutive assessment years 1961-62 to 1964-65 for our opinion :

(2.) THE facts, as briefly stated, are that the assessee is a trust. As per the trust deed, 60 per cent, of the income of the trust was to be spent for charitable and religious purposes and the remaining 40 per cent, was to be spent for the descendants of the settlor for a period of 20 years and thereafter, the entire income was to be utilised for charitable purposes. All the relevant assessment years fell during the interregnum period of 20 years, which expired on January 30, 1964.

(3.) WE have carefully gone through the decision of the Bombay High Court in Trustees of K.B.H.M. Bhiwandiwalla Trust v. CWT, 1977 106 ITR 709. It proceeds on the footing that there is a difference in the language between the Indian Income-tax Act and WEalth-tax Act. Whereas under the former, the income applied for charitable and religious purposes can be conveniently apportioned, the same is not possible for allowing exemption under Section 5(1)(i) of the Act. It was held that for the purpose of wealth-tax either a property can be said to have been held for charitable and religious purposes or not at all ; apportionment is not possible. The Bombay High Court summed up the distinction in between the two Acts as follows (last paragraph at page 716) :