C.S.R. VISALAKSHI TRUST vs Commissioner of Income Tax

R. Jayasimha Babu, J.

The question referred to us for consideration at the instance of the revenue is as to whether on the facts and in the circumstances of the case the

Tribunal is right in law in holding that the dividend income earned by the assessee in respect of shares held by it in M/s. Varadhalakshmi Mills Ltd.

was exempt from tax u/s 11 of the Income Tax Act, 1961.

The assessee is a charitable trust registered under the Societies Registration Act, 1860. During the assessment year it had received a sum of Rs.

4,500 as dividend from Varalakshmi Mills Ltd., and a sum of Rs. 15,000 as dividend from Anglo French Textiles Ltd. That income was assessed

to tax by the Income Tax Officer on the ground that the funds of the Trust remained invested in those companies during the accounting year and

that the trustees and their relatives had substantial interest in those companies. The appeal by the assessee to the Commissioner having proved

unsuccessful it carried the matter in further appeal to the Tribunal. The Tribunal has held that the dividend income should be treated as exempt u/s

11 by following the earlier order of the Tribunal in respect of the same assessee relating to the assessment years 1976-77 to 1980-81.

Learned counsel for the revenue was unable to tell us as to whether a reference had been made in respect of those earlier years and, if so, what

the result of the reference was.

The order of the Tribunal has merely referred to the order made for the earlier years. Copy of that order made for those earlier years has not

been placed before us. We are, therefore, kept in the dark as to the reasons which impelled the Tribunal to hold that exemption was available u/s

As it is the duty of the revenue, which has brought the reference before us to place the relevant material which it has failed to do and also

having regard to the fact that the tax implication is only a sum of Rs. 12,000, we return the question referred to us, unanswered.