THIAGARAJAR CHARITIES Vs. ADDITIONAL COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE identical questions referred by the Income-tax Appellate Tribunal, "A" Bench, Madras, for the opinion of this court in these two cases are the following :

(2.) THE assessee as the same in both the cases. THE questions relate to the assessment years 1964-65 to 1966-67. THE objects of the trust, according to the trust deed dated June 4, 1962, are :

(3.) THE department took up the matter in appeal before the Tribunal. THE Tribunal found that the objects mentioned in Clauses (a) and (b) would fall under the head "education", the objects mentioned in Clause (c) would fall under the head "medical relief" and those mentioned in Clauses (d), (e) and (f) would fall under the head "relief of the poor" and that the department does not dispute that the objects mentioned in Clauses (a), (b), (c) and (e) fall under the aforesaid heads. But in view of Clause (g), which provides for the trust carrying on cottage industries and the absence .of anything in the trust deed to show that there is no profit motive, profit motive, on the other hand, being implied if the funds of the trust are to be invested in cottage-industries, the Tribunal held that there is involvement in activity for profit and, therefore, the income derived from the business of purchase and sale of cotton, though held in trust, is not exempt from tax under Section 11 of the Act. THE Tribunal allowed the appeals and set aside the orders of the Appellate Assistant Commissioner and restored those of the Income-tax Officer.