RAM BHAWAN DHARAMSHALA Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) ON an application filed under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following question for our opinion ;

(2.) THE relevant assessment year is 1969-70. A trust was created by one Shri Ramchander Johari vide trust deed dated November 8, 1962. THE assessee-trust claimed exemption under Sections 11 and 12 the Income-tax Act, 1961. THE Income-tax Officer refused the exemption on various grounds including the ground that the settlor of the trust had exclusive control on the subject-matter of the trust property and a portion of the property was let out to a firm at a meagre amount of rent, in which one of the trustees was a partner in the firm and that the property of the trust was also utilised by the members of the family of the settler. THE Income-tax Officer was of the view that the rent of the first floor of the trust property let out to the firm only for Rs. 200 per month, while the rent of that portion has been estimated at Rs. 16,000, therefore, this comes under the exception of Section 13(2)(b) read with Sub-section (3) of the Income-tax Act, 1961.

(3.) IN the result, we answer the question referred in the affirmative, i.e., in favour of the Revenue and against the assessee.