COMMISSIONER OF INCOME TAX Vs. BHANDARI P

JUDGEMENT

(1.) AS all the three tax cases relate to the same assessee for different years and as the issues involved are also the same, they are dealt with together.

(2.) THE assessee created a trust called "Dileep Kumar Marriage Trust" by a deed dated January 22, 1969, for the benefit of the prospective wife of his minor son, Dileep Kumar. On the same day the assessee's wife created a trust called "Pradeep Kumar Marriage Trust" for the benefit of the prospective wife of another minor son, Pradeep Kumar. After creating the two trusts, the assessee made cash gifts on various dates to the extent of Rs. 17,500 to the "Dileep Kumar Marriage Trust" and the assessee's wife made cash gifts on various dates to the extent of Rs. 37,500 to "Pradeep Kumar Marriage Trust", the assessee made cash gift of Rs. 22,500 and his wife made cash gift of Rs. 32,500. In the original assessment of the assessee for the year 1970-71. the income accruing to the trust was not taken note of. After completion of the original assessment, the ITO reopened the assessments of the assessee under Section 147(b) of the I.T. Act, 1961, hereinafter referred to as the Act and included the proportionate share income of the trust as the income of the assessee on the ground that the trusts created by the assessee and his wife are invalid.

(3.) TO appreciate the contentions urged by the Revenue before us, we have to refer to the terms of the trust deeds. The terms of the trust deeds executed by the assessee and his wife are practically the same and it will suffice if we refer to the terms of the trust deed dated January 22, 1969, executed by the assessee. The preamble to the trust deed makes it clear that the assessee intended to make a provision for the prospective wife of his minor son, Dileep Kumar and with that intent the trust deed dated January 22, 1969, known as " Dileep Kumar Marriage Trust" was created. He settled on the trust Rs. 1,000 and made the following gifts to the trust later : <FRM>JUDGEMENT_500_ITR147_1984Html1.htm</FRM>