Commissioner of Wealth Tax vs Kikabi's Educational Trust

R. Jayasimha Babu, J.—We find no substance in these references. The Tribunal has held that there was no infringement of the provisions of

Section 13(2)(h) read with Section 13(4) of the Income Tax Act, 1961, on the basis of the materials placed before it. No error in the

consideration of materials has been brought to our notice. The Tribunal has held that there was no diversion of the trust''s fund by the trustees for

the benefit of any person mentioned in Section 13(2) of the Act.

The assessee is admittedly an educational trust. The fact that the trustees happen to be partners of firms and that they had assigned to the trust

irrevocably their share income to the trust would not result in any diversion of fund by the trust to the trustees. On the other hand, the income

otherwise receivable by the trustees had the assignment not been effected, after the assignment is received by the trust. There is no question of

diversion of the trust''s funds for the benefit of the trustee. The Tribunal has also held so. Moreover, the amounts involved are relatively very small

ranging from Rs. 728 to the maximum of Rs. 3,063 for the assessment years 1973-74 to 1981-82. That the trust receives income from a business

is by itself not a ground to deny the benefit of section 10(22) of the Act. In the background of these facts we are satisfied that there are no errors

on the part of the Tribunal in holding in favour of the assessee. The questions referred to us namely :

(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that there was no diversion of trust

funds by the trustees for the benefit of any person mentioned in Section 13(5) of the Income Tax Act and that there was no infringement of the

provisions of Section 13(2)(h) read with Section 13(4) of the Income Tax Act, 1961 ? and

(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee was entitled to

exemption from the levy of wealth-tax for the assessment years 1973-74 to 1981-82 ?

are answered in favour of the assessee and against the Revenue.