9911796707
TMI Blog1973 (7) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 31, 1953, 1954, 1958 and 1956, respectively. Assessee, Ambalal J. Patel, died in June, 1961. During his lifetime he was assessed in the status of an " individual ". He used to derive income from several sources, such as salary from M/s. Patel India (Private) Ltd. (a family limited concern), M/s. Associated Film Industries Private Ltd., dividends, director's fees and a dairy farm. For all these sources of income, the previous year was the calendar year. While completing the assessments in respect of the above years, income from advertisement business at Chowpatty Bridge was included according to the financial year ended March 31. For this advertisement business, a separate set of account books was maintained and those books were also got audited by chartered accountants. The income and expenditure accounts of the advertisement business for several financial years concerned showed the receipts from advertisers on the credit side and the expenses on account of salaries, municipal taxes, licence fees, electricity charges, printing, stationery, etc., as well as cost of " construction of super-structure for hoardings " on the debit side. The correctness of these income and expenditu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the taxable territories, shall not be included in the total income of the person receiving the same while calculating his income, profits and gains for the purpose of assessment. In order that the benefit of this exemption cap be claimed by any assessee, the following conditions must be fulfilled : 1. The income must be derived from property. 2. Such property should be held under trust or other legal obligation. 3. Such trust or other legal obligation should be wholly for religious or charitable purposes, and 4. Such income is applied or accumulated for application to such religious or charitable purposes as relate to anything done within the taxable territories. Unless the above ingredients are fulfilled the cannot successfully claim exemption under this clause. Before considering whether the above ingredients are fulfilled in the present case, it will be necessary to state the relevant facts over which there is no controversy as the same are to be found in the statement of case prepared by the Tribunal. On September 19, 1951, the assessee wrote a letter to the special engineer of the Bombay Municipal Corporation as regards his proposal for construction of a bridge over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which might be mutually decided upon. The resolution of the works committee as well as the letter of the assessee dated January 30, 1952, were considered by the Corporation at its meeting held on February 21, 1952. After referring to the same the Corporation, inter alia, resolved that the Commissioner's proposal to accept the offer of the assessed to provide at his cost a foot over bridge across the Marine Drive in front of the Mafatlal Swimming Pool near Chowpatty subject to the stipulation put by the assessee in his letter dated September 29, 1951, be approved in principle and the Commissioner be requested to submit a definite proposal for the approval of the Corporation in the matter. After this resolution it appears that the construction of the bridge was completed some time in February, 1953, and the bridge was actually thrown open to the public on March 14, 1953. Negotiations, however, continued between the assessee and the Municipal Commissioner. As a result of the discussion that took place between them, on October 28, 1953, the special engineer of the Municipal Corporation sent a revised memorandum of conditions which at the discussion were agreed upon between the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the competent municipal authorities as may be required under the provisions of the Bombay Municipal Corporation Act shall be always taken in every such case." Even though these revised terms and conditions were duly agreed upon between the assessee and the Municipal Commissioner, an actual trust deed was not executed at any time prior to the relevant assessment years with which we are concerned. In fact it was much later that a draft of the trust deed to be executed was duly approved by the attorneys of the assessee and those of the Municipal Corporation. Even an engrossment of the trust deed to be executed was prepared, but it was signed only by the assessee but it has not been signed by anybody on behalf of the municipal Corporation. There is, however, no controversy between the parties that this draft trust deed was registered under the provisions of the Bombay Public Trusts Act and the Deputy Charity Commissioner issued a certificate of registration on November 30, 1961. Later on, on January 22, 1963, the Deputy Municipal Commissioner (Improvements) issued a certificate as under : " This is to confirm that the Jhaverbhai Patel Over bridge at Chowpatty does not belong to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well-settled that in, order that a property may be impressed with trust or legal obligation as contemplated under secti6n 4(3)(i), a formal document is unnecessary. The forwarding of the revised terms and conditions which were agreed upon as a result of the discussion between the assessee and the Municipal Commissioner itself is sufficient to show that the property, namely, the right to exploit either side of the over bridge as advertising, space so as to yield income, was held under trust or legal obligation for the purpose which is mentioned in condition No. 9 hereinbefore referred to. There cannot be much controversy between the parties as regards the purpose for which the net income of this trust was to be utilised, having regard to the revised terms and conditions agreed upon between the assessee and the Municipal Commissioner. That object is set out in revised condition No. 9 (part of annexure " F "). It is amply made clear by this condition that the amount that was credited to the fund shall be utilised solely for providing works of public amenities. If that is so, then the property is not only impressed with the character of a trust or legal obligation, but the trust or th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
