S.K.Keshote, J. - (1.) The Revenue has filed this application under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the 1961 Act"), praying therein that the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, be directed to draw up a statement of the case and refer the questions of law as mentioned in paragraph 3 of this application to this court for decision therein.
(2.) Briefly stated, the facts of the case are that on August 26, 1987, a search under Section 132(1) of the 1961 Act by the concerned income-tax authorities was conducted on the business and residential premises belonging to Shri Subhash Kumar and Shri Tagore Kumar, both sons of the late Sri Laxmi Prasad. While the Department was proceeding against these two aforesaid persons under Section 132(5) of the Act, some of the unexplained assets and documents were claimed as belonging to an association of persons styled as Messrs, Laxmi Prasad and Sons. They stated that their father, late Laxmi Prasad, during his lifetime executed a registered will on November 24, 1977, whereunder after his death movable and immovable assets owned by him will become the property of his two sons named above. Sri Laxmi Prasad was reported to have died on April 30, 1979, and, consequently, the said movable and immovable property/assets willed to them became the property of both of his sons, namely, Sri Subhash Kumar and Sri Tagore Kumar, under the said will. A case has been built up by these two persons that in pursuance of the will dated November 24, 1977, executed by the late Sri Laxmi Prasad, a trust in the name and style of Messrs. Laxmi Prasad and Sons Ltd. was created by them.
(3.) During the course of assessment proceedings, the Deputy Commissioner of Income-tax (Assessment), Allahabad, after a careful consideration of the facts found that the alleged trust or association of persons had enjoyed taxable income right from the assessment years 1982-83 to 1988-89. It has been held by the said authority that the registered will dated November 24, 1977, did not create any trust. The fact has also been noticed by the said authority that even during the search and seizure no mention whatsoever had been made of the aforesaid trust or association of persons. As per the said authority, the facts which have come from the records indirectly suggest the idea of the trust, association of persons was an afterthought of Sri Subhash Kumar.;