TMI Blog1994 (6) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... . Kalindi Jayantilal Patel of Dholka as trustees to hold the said sum for the benefit of three beneficiaries who are mentioned in clause (2) of the said deed of settlement and their names are as under: 1. Hemesh, son of Shri Navnit Kanaiyalal Patel, 2. Pinakin, son of Shri Bhagwandas Gordhandas Gujarati. 3. Amarish, son of Shri Bhagwandas Gordhandas Gujarati. There are several terms and conditions set out in the deed of settlement and the same are not being extracted here being irrelevant for deciding the dispute in the appeal. The said deed of settlement Xerox copy of which has been filed by the assessee's counsel Shri S.N. Soparkar contains 15 typed pages. On the first page of the said deed of settlement it is recited 'this settlement is made at Ahmedabad on 20-4-1982 between...' and on the last and the 15th page it is recited on the left side "solemnly declared at Dholka by the.... and the settlor Shri Ishwardas Gordhandas Patel has signed it". There are two signatures of witnesses, namely, Shri Kanjibhai Nagarbhai Patel and Shri Dineshbhai Keshavlal Shah. The three trustees named above have also signed against their typewritten names. The signature of other two trustees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the trust created by the settlor was bogus, illegal and invalid. The A/C therefore framed an issue, whether the trust is bogus, illegal and invalid trust. According to the A/C from the facts on record it was obvious that the main reason for treating the trust as bogus by the Assessing Officer is that there is a discrepancy in the date while as per the deed of settlement it is 20-4-1982, it is claimed later on that it was executed on 20-9-1982. Another reason was that while the settlor of the trust is a resident of Bombay and the trustees are at Pune and Dholka and the business of the trust is at Ahmedabad. Through letter dated 5-3-1987 it was explained that at the time of original assessment a copy of the trust deed was submitted which was executed on a stamp paper dated 5-7-1982. The date of execution of the deed of settlement was mentioned through oversight as 20-4-1982 instead of 20-9-1982. In support of the contention of the correct date of execution was 20-9-1982 an affidavit dated 16-10-1986 solemnly affirmed at Bombay by the settlor Shri Ishwardas Gordhandas Patel was filed. In this affidavit the settlor (deponent) had stated that the deed of settlement was actually execu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p duty in accordance with the provisions of Bombay Stamp Act, variance in the signature of one of the trustees viz. Shri Purshottamdas Bhikhabhai Patel at page 15 of the deed of settlement in comparison with the signature of the said person/trustee on the affidavit dated 27-2-1987 affirmed at Dholka. If all these factors were judiciously considered by the A/C then his decision would have been perfect and justified in law. According to the D.R. no trust came into existence by virtue of the alleged deed of settlement which was executed on 20-4-1982 and not on 20-9-1982 as has been made out by the trustees. The D.R. therefore submitted that the impugned order of the A/C was not in accordance with law and therefore should not be sustained. 4. The assessee's counsel Shri S.N. Soparkar on the other hand submitted that there has been a bona fide and genuine mistake in mentioning the correct date of execution of the deed of settlement which was on 20-9-1982 and not on 20-4-1982 as was written and reiterated at two places in the deed of settlement executed by the settlor Shri Ishwardas Gordhandas Patel. Regarding user of the stamp paper by the settlor which was purchased by Shivalaya Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the assessee's A.R. the A/C has considered the issues before him in proper perspective and the impugned order being valid and proper in law requires to be upheld by us. 5. We have heard the elaborate arguments advanced by representative of both the sides. We have also perused copy of the questioned deed of settlement and the affidavits of the settlor as well as of one of the trustees Shri Purshottamdas Bhikhabhai Patel. We have also gone through other documents placed by the assessee's counsel before us in this appeal. In our view the revenue has a very strong case to succeed and the A/C has taken a lopsided and illegal view being influenced and carried away by giving credence, weightage and consideration to various irrelevant and extraneous evidence and factors while ignoring very prominent and salient features which are emboldened in the present case. 6. Neither the author of the trust nor any of the trustees have been able to lead satisfactory evidence as to how and for what reasons and circumstances the date 20-4-1982 occurring at two places in the questioned deed of settlement was written and recited instead of 20-9-1982 which according to the settlor and one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny provision in the Stamp Act that a person who has purchased stamp paper can negotiate, transfer or endorse stamp papers purchased by him to or in favour of any other person to enable other person to execute an instrument on such stamp paper. Besides as per the stamp law the stamp duty on instruments chargeable to duty have to be paid to the concerned State Government where a particular instrument/document is executed. In the instant case since the instrument was executed at Ahmedabad (or at Dholka) then the deed of settlement should have been executed on stamp papers purchased within the State of Gujarat which factually is not done. And admittedly the stamp papers purchased by another person viz. Shivalaya Construction Co. at Bombay have been used and utilised for executing the deed of settlement by Shri Ishwardas Gordhandas Patel. The instrument of settlement therefore is clearly inadmissible in evidence for any purpose as per the mandate contained in section 34 of the Gujarat Stamp Act, 1958 which we reproduce below and which is also analogous to the provisions of section 35 of the Indian Stamp Act, 1899: "No instrument chargeable with duty (not being an instrument referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is valid under the Musalman Wakf Validity Act, 1913) receives or is entitled to receive on behalf of or for the benefit of any person, such trustee or trustees. 9. The trustee in order to be assessed in representative capacity or as a representative-assessee in terms of section 160(1)(iv) r.w.s. 161/164 in respect of the income earned under the terms and conditions of the trust deed/settlement deed for the benefit of the beneficiaries, have to establish that there was a duly executed instrument in writing. The word 'duly' means properly and that which is as per or in accordance with law is proper. Since the instrument of settlement/trust is executed at Ahmedabad, Gujarat State without payment of duty to the Government of Gujarat which is chargeable under section 3, Schedule I of the Bombay Stamp Act then the same cannot be said to be an instrument which is 'duly executed' and that being the case the trustees cannot be assessed as and in a representative capacity under section 161 in respect of the income earned by them, in terms of the Deed of Trust. The income therefore, earned by them; that is to say by the trustees, has therefore to be considered in law as income earned b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the three trustees and two witnesses have contributed their signatures. The first trustee is Shri Purshottamdas B. Patel and he has signed against his name in Gujarati as 'Fakirbhai Patel'. This trustee has also filed an affidavit dated 27-2-1987 and has signed in the said affidavit in Gujarati as 'Purshottamdas B. Patel' and not as 'Fakirbhai Patel' as has been signed against his name on the 15th and last page of the deed of settlement. We cannot accept the plea of the assessee's counsel that since this case was not examined from this angle by either the Assessing Officer or by the first appellate authority the same cannot be taken note of by us in deciding the present appeal. 12. We are unable to appreciate as to why we should be asked to keep our hands off and refrain from scrutinising judicially important documentary evidence which forms part of the case on the spacious plea that the same escaped the attention of the lower authorities. When any illegality, dubious act or colourable transactions are noticed by the Tribunal though for the first time then we cannot turn a Nelson's eye and approve the same being unmoved and unconcerned thereby remaining silent and passive as mute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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