COMMISSIONER OF WEALTHTAX Vs. BHARAT CHARITY TRUST

JUDGEMENT

(1.) IN this reference under S. 27(1) of the "WT Act, 1957 ('the Act) for the asst. yrs. 1973-74,1974-75 & 1975-76, the following question of law has been referred to this Court:

(2.) THE facts relate to this question are that the WTO found that the assessee-trust had 1775 shares of Shree Krishan Shares Pvt. Ltd. valued at Rs. 89,437. These shares were received by the assessee-trust as donations on 2nd May, 1962, 6th May, 1963 and 18th May, 1965. In addition to the above 1775 shares, the assessee-trust acquired on 4th Dec., 1971 as further block of 90 shares of the same company valued at Rs.9,000. The WTO further found that the aforesaid company was one in which the trustees of the assessee-trust were interested. Hence, he applied the provisions of ss. 13(3)(b), 13(3) (e) and 13(2)(h) of the IT Act, 1961 and as a consequence thereof, treated the entire income of the assessee-trust as liable to tax and invoked the provisions of S. 21A. In this manner he treated the entire income of the assessee-trust as liable to wealth-tax.

(3.) THE Department appealed to the Tribunal contending that the AAC was not justified in deleting from the total wealth of the assessee the value of the initial donation of shares to the tune of Rs.89,437.