COMMISSIONER OF INCOME-TAX vs. JAMJODHPUR LOHANA MAHAJAN

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ITR/90/1995HC GujaratGJHC24022415199519 January 2006Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI4 pages
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What did the High Court hold?

The High Court held that the Tribunal was justified in its finding. Both the Tribunal and the Deputy Commissioner of Income-tax (Appeals) had concurrently found that the donations, amounting to Rs. 81,609, were received for a specific purpose – the construction of a Vridhashram Building and additions to an old building. These donations were considered part of the corpus of the trust and therefore not income of the trust. This treatment aligns with the bracketed portion of Section 12 of the Income Tax Act, 1961, which pertains to contributions with a specific direction to form part of the corpus. The High Court found no material on record to dislodge these concurrent findings. Consequently, the question referred to the High Court was answered in the affirmative, in favour of the assessee and against the revenue. The reference stood disposed of accordingly.

What were the facts?

The case concerns Income Tax Reference No. 90 of 1995 before the High Court of Gujarat. The assessment year is 1987-88, corresponding to Samvat Year 2042. The Commissioner of Income-tax (the applicant revenue) has referred a question of law to the High Court. The respondent assessee is Jamjodpur Lohana Mahajan. The dispute revolves around whether certain donations received by the assessee trust constitute its income. The Tribunal, along with the Deputy Commissioner of Income-tax (Appeals), had concurrently held that the donations were for a specific purpose, namely the construction of a Vridhashram Building and additions to an old building, and thus formed part of the trust's corpus, not its income. The revenue is challenging this finding.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the donations in question did not represent the income of the assessee trust? (Question of law, turning on Section 12 of the Income Tax Act, 1961). Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. The High Court notes that though served, there was no appearance on behalf of the respondent assessee. Revenue's Contentions: The learned senior standing counsel for the applicant revenue appeared and argued the matter. However, the judgment does not detail the specific arguments or authorities relied upon by the revenue, other than implicitly challenging the Tribunal's finding that the donations were not income.

Which sections of the Income-tax Act were involved?

Section 12

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITR/90/1995 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 90 of 1995 For Approval and Signature:  HONOURABLE MR.JUSTICE D.A.MEHTA  HONOURABLE MS.JUSTICE H.N.DEVANI  ==============================================================  1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ==============================================================  COMMISSIONER OF INCOME-TAX - Applicant(s) Versus JAMJODHPUR LOHANA MAHAJAN - Respondent(s) ==============================================================  Appearance : MR MANISH R BHATT for Applicant NOTICE SERVED for Respondent(s) : 1, ================================================================== CORAM :  HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 09/01/2006

ORAL JUDGMENT (Per : HONOURABLE MS.JUSTICE H.N.DEVANI) 1.The Income Tax Appellate Tribunal, Ahmedabad

ITR/90/1995 2/4 JUDGMENT Bench “A” has referred the following question under Section 256(1) of the Income Tax Act, 1961 : “Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the donations in question did not represent the income of the assessee trust?” 2.The assessment year is 1987-88 and the corresponding accounting year is Samvat Year 2042. 3.Heard Mr.M.R.Bhatt, the learned senior standing counsel for the applicant revenue. Though served, there is no appearance on behalf of the respondent assessee. 4.As can be seen from the orders of the Tribunal as well as the Deputy Commissioner of Income

ITR/90/1995 3/4 JUDGMENT Tax (Appeals), both the authorities have concurrently found that the donations of Rs.81,609/-, had been received for a specific purpose i.e. for construction of Vridhashram Building and addition to old building. That the donations which form part of the corpus of the trust are, therefore, not an income of the trust. The aforesaid amount would, therefore, fall within the bracketed portion of Section 12 of the Act, being contribution with specific direction that they shall form part of the corpus of the trust or institution. In the circumstances, the amount in question has rightly been held to be not an income of the trust. Nothing has been pointed out to dislodge the aforesaid findings of the authorities. 5.In the circumstances, it is held that the Tribunal was justified in holding that the donations in question did not represent the ITR/90/1995 4/4 JUDGMENT income of the assessee trust. The question is, accordingly, answered in the affirmative i.e. in favour of the assessee and against the revenue. 6.The Reference stands disposed of accordingly. There shall be no order as to costs. [D.A.MEHTA, J.] [HARSHA DEVANI, J.] parmar*

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