COMMISSIONER OF INCOME-TAX Vs. COMILLA MOHAN

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following two questions of law under Section 256(1) of the Income -tax Act, 1961, for the opinion of this Court: 1. Whether, on the facts and circumstances of the case, the Income -tax Appellate Tribunal was justified in holding that the assessee's -trusts were validly created trusts, when the sole beneficiaries of these trusts were neither in existence nor were identifiable at the time of creation of the trusts?

(2.) WHETHER , on the facts and circumstances of the case, the Income -tax Appellate Tribunal was justified in confirming the Commissioner of Income -tax (Appeals)'s decision holding that the dividend income arising out of 60,000 shares of Mohan Meakin Ltd. transferred by the assessee to two trusts could not be validly included in the hands of the assessee? 2. The reference relates to the assessment years 1977 -78, 1978 -79 and 1979 -80.

(3.) SMT . Comilla Mohan created two trusts known as first son of Vinay Mohan and the first son of Hemant Mohan dated February 18, 1973, and May 22, 1973, respectively, by transferring 60,000 equity shares of Mohan Meakin Ltd. As per the Department's stand, these two trusts were not validly created as the sole beneficiary of each of the two trusts was neither in existence nor identifiable at the time of the creation of these trusts. Due to creation of these trusts the assessee did not show the dividend income on the above shares in her returns of income. Hence, the Department took action under Section 147(a)/148 and added the dividend income on these shares in the hands of the assessee.