KAMLA TOWN TRUST Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE two references are inter -connected. I.T.R. No. 18 of 1973 has been made at the instance of M/s. Kamla Town Trust, the assessee. It is a consolidated reference relating to the assessment years 1949 -50 to 1955 -56. I.T.R. No. 715 of 1972 is at the instance of the Commissioner of Income -tax. It is also a consolidated reference and relates to the assessment years 1956 -57 to 1965 -66.

(2.) THE two principal questions that require consideration are -

(3.) ON 15th January, 1946, the three Singhania brothers retired from a partnership firm called J. K. Hosiery Factory. On 5th February, 1946, the firm, J. K. Hosiery Factory, was reconstifuted. In the reconstituted firm the Kamla Town Trust became a partner. In the assessment proceedings for the year 1948 -49 relating to the linn, J. K, Hosiery Factory, a question arose whether Kamla Town Trust was a public charitable trust so as to be exempt from tax under Section 4(3)(i) of the Indian I.T. Act, 1922. The Tribunal held that after rectification some of the objects were charitablebut some were not of a charitable nature. The trust being for mixed objects was not a public charitable trust and was not exempt under Section 4(3)(i) of the Indian I.T. Act, 1922. The Tribunal gave its decision on 11th May, 1953.