TMI Blog2001 (11) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... atakrishnan and S. Rukmani. Their parents, Mrs. Usha Srinivasan and Dr. V. Srinivasan were made trustees. The trust entered into an agreement with the assessee on April 13, 1981, by which the assessee permitted the trust to construct a building on the land belonging to the assessee. In consideration of this permission, the trust allowed the assessee to conduct his clinic, and to use the facilities available at the nursing home for his own patients. This agreement also recorded the willingness of the assessee to sell the land to the trust for Rs.55,000 if the transaction is concluded within three years. The land was not sold. Subsequently, the board of trustees resolved to let out the premises to the assessee on a monthly rent of Rs.15,000. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficiaries was an admissible deduction in computing the income of the assessee? (2) Whether, having regard to the facts and materials on record, the Tribunal was right in law in holding that section 40A(2) did not stand attracted?" For an earlier assessment year 1981-82 in the assessment of the Ayyappa Family Trust, it had been held by the Assessing Officer that: "The trust receives money from the rent from the building constructed and the trust distributes the money to the two beneficiaries assessed individually in 1(4) Circle and wealth-tax is also assessed. It is an assessment to regularise the original return accepted under section 143(3)." The trust also was found to have obtained loan from the bank for the purpose of constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperties; section 164 was held not applicable for the purpose of levying income-tax on the trust and tax was levied only in the hands of the beneficiaries. The Department having recognised the trust and taxed the beneficiaries under the Wealth-tax Act as well as under the Income-tax Act cannot alter its stand and refuse to recognise the trust. The rent paid by the assessee has been treated as income for the trust. The genuineness of the trust has not been doubted. The ownership of the land by the assessee does not disentitle the trust from being the owner of the building, the assessee having consented to the trust jutting up the building with its funds. Though the building licence had been obtained in the name of the assessee, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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