S S DHARMENDRAKUMAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference at the instance of the assessee under S. 256(1) of the IT Act, 1961, for calling a reference from the Tribunal. The following three questions have been referred by the Tribunal for answer by this Court :

(2.) BRIEF facts giving rise to this reference are that the year of assessment involved is 1980-81 to 1983-84. The assessee, Shri S.S. Dharmendrakumar was assessed in a status of an individual. The assessee received certain properties in family partition when he was a minor. He was the natural son of Padamchand and was given in adoption to his younger brother Shri Rishabhkumar. After the said adoption, certain movable and immovable properties received by him in the family partition were dedicated to Deity Deo Parasnathji Digambar Jain, Naya Mandir Khurai, on 1st Nov., 1971. The said dedication was evidenced by declaration dt. 15th Nov., 1971 by the putative father of the assessee as his guardian. The Deity was a public trust. Rishabhkumar was the adoptive father of the assessee and was managing the trust. On attaining majority, the assessee affirmed dedication of his properties made on 1st Nov., 1971 by filing an affidavit on 23rd Dec., 1978. The property dedicated to the Deity was mutated in the name of the Deity and was managed by the trust and the same appeared in the balance sheet of the trust year after year. The income was utilised by the trust for religious and charitable purposes and was included in the P&L a/c of the trust year after year and was assessed to income tax ? The ITO re-opened the original assessments already completed for the accounting years 1980 to 1984 under S. 147 of the Act and included the income from immovable property transferred to the Deity in the hands of the assessee on the ground that he had held the property in the wealth-tax proceedings against the assessee that the properties, though transferred, yet the ownership thereof still remained with the assessee for want of registered document of transfer in favour of the Deity. He, therefore, included the properties in the wealth of the assessee and also included the income therefrom in the income of the assessee. He rejected the contention of the assessee that the income from the said properties was already assessed in the hands of the trust. This order was challenged in appeal before the AAC who held that the trust was the beneficial owner and, therefore, income was not assessable in the hands of the assessee. Thereafter the Department came up in appeal before the Tribunal and the assessee also filed an appeal against certain observations of the AAC. The appeal was dismissed by the Tribunal as infructuous.

(3.) WE have heard learned counsel for the parties and perused the record.