COMMISSIONER OF INCOME TAX Vs. GOPALAKRISHNA KONE E M

JUDGEMENT

(1.) THIS is a consolidated reference under S. 66(1) of the Income-tax Act, the question referred for our opinion being common for the two years of assessment, 1957-58 and 1958-59. As formulated, the question is a rolled up one, the first part of it relating essentially to a finding of fact arrived at by the Tribunal, while the latter is a question of law. The substantial matter referred for our decision relates to the operative nature of two deeds of trust executed by the assessee on 1-4-1943 and 7-3-1956. The question, as referred, runs:

(2.) TO appreciate the contention, it will be necessary to set out a few facts. The assessee, E. M. Gopalakrishna Kone, is a well-known publisher of Tamil Books and school text-books, having his business place in Madurai town. He owns a printing press called "Excelsior press". He was childless and being charitably disposed, was rendering help to the poor and indigent, particularly to school children. But till the year 1943, on 1-4-1943, he purported to dedicate Ac. 36-82 cents in Sirudur village and his entire interest in his business printing press, publication, copyright etc., for the purpose of establishing and maintaining an educational institution for girls and another of imparting training in handicrafts to poor boys, who were also to be given free food. The trust further envisaged the granting of scholarships and the free supply of books to deserving students. Paragraphs 7 to 9 of the document which will be found relevant for the consideration of the latter part of the reference, stated:

(3.) THE amount spent for the construction of the theatre during the years 1950 to 1956 was Rs. 3,50,000. THE theatre did not bring much money to the assessee. THE loss in the venture was treated as his loss during the assessment year 1956-57.