TMI Blog2009 (7) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the surplus was transferred to the trust and utilised in purchase of land and construction of building (sabha bhavan) - Thus, on the basis of finding recorded by the Tribunal we are of the considered opinion that sub-section (4A) of section 11 of the Act is not applicable in the present case. - We, therefore, answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. - 4 of 2000 - - - Dated:- 20-7-2009 - R. K. AG R AWA L and S. K. GUPTA JJ. A. N. Mahajan for the Commissioner. Amitabh Agarwal for the assessee. JUDGMENT 1. The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(1) of the Income-tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donations. Being unable to get further donations in subsequent years, Dr. Ashwani Kumar raised funds by organising a coaching institute for the benefit of students seeking admission to various institutions. Lectures were organised and correspondence course was also started. A comprehensive study material was prepared by Dr. Aswani Kumar involving an expenditure of Rs. 1,84,068, in the previous year relevant to the assessment year 1990-91, for printing of 1,000 copies of the study material. A vigorous campaign of publicity was mounted through national newspapers. In all these advertisements, the name mentioned was "Logarithmica Educational Agency" and there was no mention of the name of the trust. The Assessing Officer recorded the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Commissioner of Income-tax (Appeals) reversed both the findings of the Assessing Officer and held that the trust was a valid one and that its income was not from business and, hence, the provisions of section 11 (4A) were not attracted. Accordingly, the income was treated as exempt under section 11 of the Act. Against this order of the learned first appellate authority, the Department filed an appeal before the Appellate Tribunal (I. T. A. No. 690(Alld.)/1995) contesting both the findings of the first appellate authority. 8. The Tribunal had held that the trust was genuine and valid so far as the question was to whether the activities of "Logarithmica Educational Agency" was carried out by the trust or by Dr. Ashwani Kumar in his indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded and he confirmed that Logarithmica Educational Agency had been specifically started with a clear motive of earning profit to be invested later in the trust to carry out objects of the trust. In view of these cumulative facts, we agree with the Commissioner of Income-tax (Appeals) that the trust was genuine and valid and the income belonged to the trust in substantive capacity and not just protective capacity. In other words, we hold that the income belongs to the trust and not to Dr. Ashwini Kumar, individual, as held by the Assessing Officer. We may note here that the Commissioner of Income-tax (Appeals) has recorded in paragraph 4 of his order for the assessment year 1990-91 that it is a common fact and it has been agreed by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the activities of Logarithmica Educational Agency was carried out by the trust as clause 4 of the trust deed empowered the trust to start educational agencies for earning income to achieve aims and objects of the trust. The Tribunal has further found that the surplus was transferred to the trust and utilised in purchase of land and construction of sabha bhavan. 12. Thus, on the basis of finding recorded by the Tribunal we are of the considered opinion that sub-section (4A) of the Act is not applicable in the present case. 13. We, therefore, answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. The reference is accordingly answered. 14. However, there shall be no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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