COMMISSIONER OF INCOME TAX Vs. RAMCHANDRA PODDAR CHARITABLE TRUST
LAWS(CAL)-1983-7-23
HIGH COURT OF CALCUTTA
Decided on July 18,1983

COMMISSIONER OF INCOME TAX Appellant
VERSUS
RAMCHANDRA PODDAR CHARITABLE TRUST Respondents

JUDGEMENT

S.C.Sen, J. - (1.) The assesee is a religious and charitable trust. The relevant assessment year is 1967-68 (financial year 1966-67). The issue before the Income-tax Officer was whether the donation of shares made by one charitable trust to another would amount to application of income for charitable purposes within the meaning of Section 11(1)(a) of the Income-tax Act, 1961 ("the Act").
(2.) The assessee's income during the relevant accounting period was Rs. 30,201. The Income-tax Officer found that Rs. 13,387 were applied towards charitable purposes. The expenses amounted to Rs. 328. The Income-tax Officer calculated that there was an accumulation of a sum of Rs. 16,486 out of the year's income (Rs. 30,201 minus Rs. 13,715). This exceeded 25 per cent. of the assessee's income or Rs. 10,000. The assessee was, therefore, held liable to tax.
(3.) Before the Appellate Assistant Commissioner, it was argued that the assessee had donated 1,500 shares of Poddar Automobiles Ltd. valued at Rs. 15,000 to Subhkaran Poddar Charitable Trust and 1,500 shares of Bharat Credit Corporation valued at Rs. 15,000 to Nandalal Poddar Charitable Trust. The Income-tax Officer should have held that an amount of Rs. 30,000 had been donated by way of shares for charitable purposes. The Appellate Assistant Commissioner, following an order of the Tribunal dated December 30, 1972, in I.T. Appeal No. 3822 (Cal) of 1971-72, held that the donation of shares valued at Rs. 30,000 should have been taken by the Income-tax Officer as application of income for charitable purposes.;


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