CIT Vs. YADURAJ KANODIA TRUST

JUDGEMENT

(1.) THESE references under Section 256 (1) of the Income Tax Act, 1961 (the Act) relating to the assessment year 1981-82 (previous year ending 31.3.1981 and 1982-83 (previous year ending on 30.6.1981) arise out of the orders passed by the Income Tax Appellate Tribunal in Kanodia Group of cases. Separate reference application was filed by the revenue, before the Tribunal. The common question of law raised in all these references is as follows:-

(2.) THE Yaduraj Kanodia Trust, Kanpur is assessable as an AOP. The trust came into existence on 26.9.1978 with Master Yaduraj Kanodia (minor son of Shri G.P. Kanodia) as its sole beneficiary. During the previous year, relevant to the assessment year 1980-81, the trust received by way of gift the National Defence Gold Bonds weighing 10000 gms from Shri D.P. Kanodia & Smt. Ratan Devi Kanodia (wife of Shri B.M. Kanodia). These National Defence Gold Bond 1980 were issued as per notification dated 19.10.1965 (as amended upto 19.11.1965) issued by the Ministry of Finance, Department of Economic Affairs. The relevant para of the notification provided:-

(3.) THE repayment of gold bonds was to start from 27.10.1980. Prior to the arrival of the said date, the assessee sold the gifted quantity of gold bonds of 3000 grams on 5.9.1980; 5000 grams on 6.9.1980 and 2000 grams on 18.9.1980 (total 10000 grams of the value of Rs. 12,67,000.00.