TMI Blog1991 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ax. The petitioner-trust applies its funds for public and religious purposes in India and it maintains and runs hospitals, temples, etc. The petitioner-trust has its head office at Ladnu, district Nagaur, and a branch at Calcutta. The trust maintains regular books of account both for its head office and the branch office. Ladnu is small town in the district of Nagaur in Rajasthan and it had no public water supply scheme. In 1961, a public water supply scheme was mooted for the town of Ladnu by the Government of Rajasthan. It was estimated to cost about Rs. 10 lakhs. The State Government agreed to provide water to the town if the public contributed about Rs. 3 lakhs and the balance amount was to be borne by the State Government. The petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income each year with the Income-tax Officer, Nagaur. For the accounting period April 3, 1963, to April 19, 1964, the relevant assessment year being 1964-65, the petitioner filed its return of income with the Income-tax Officer, Nagaur. Along with the return, the petitioner-trust filed copies of the income and expenditure accounts and balance-sheets of both the head office and the branch office at Calcutta. The Income-tax Officer was not satisfied and, in order to verify the correctness and completeness of the return, he issued a notice under section 143(2) of the Act. The accountant of the trust and its counsel attended and produced the books of account of the Ladnu and Calcutta offices and all relevant vouchers and correspondence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng upon the petitioner to file a fresh return. The petitioner filed objections on March 16, 1981, stating that there was no omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment. All the material facts had been disclosed and noted by the Income-tax officer and are on the record. Thereafter, the Income-tax Officer passed the assessment order. Therefore, the petitioner has challenged this notice issued under section 148 of the Act by filing the present writ petition. The main grievance of the petitioner is that there is no question of escape of income from assessment for the year 1964-65 as the petitioner has disclosed all the facts and the same were noted by the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject, this court came to the conclusion that this amount cannot be treated to be part of the income of the petitioner-trust. It was held in the above case as under (at page 486): "The principles enunciated in the various cases referred to above, when applied to the present case, leave no room for debate that the intention of the donor-trust as well as the donee-trust was to treat the money as capital to be spent for the Ladnu Water Supply Scheme. It is of no significance whether the amount had since been paid to the State Government or kept in the account of the above-referred scheme by the assessee-trust. From whatever angle it may be seen, the deposited amount cannot be said to be income in the hands of the recipient trust. The concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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