| Case ID |
3b4f97ac-5674-456c-90d0-575f85906ca8 |
| Body |
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| Case Number |
TAX CASE No. 109 OF 1960 |
| Decision Date |
Oct 22, 1962 |
| Hearing Date |
|
| Decision |
The court held that the income derived by the assessee-trust from business is exempt from tax under the provisions of section 4(3)(i) of the Income Tax Act for the assessment years 1952-53 to 1955-56. The court concluded that where a trust carries on business and the business is held in trust, the income from such business, if applied for religious or charitable purposes, is exempt from taxation. The court emphasized that the exemption cannot be denied even if the business is conducted by someone else acting on behalf of the trust. Thus, the assessee trust was entitled to the claimed exemption under the relevant provisions of the law. |
| Summary |
In the case of Thiagesar Dharma Vanikam v. Commissioner of Income Tax, the Madras High Court examined the applicability of section 4(3)(i) of the Income Tax Act, 1961 regarding the taxation of income derived from a business operated by a charitable trust. The court found that the income earned by the trust from its business activities, which was intended for charitable purposes, qualified for exemption under the law. The ruling clarified that the operational structure of the business does not negate the trust's entitlement to tax exemptions if the income is ultimately used for its intended charitable objectives. This case is significant for understanding tax exemptions for trusts and the interpretation of relevant statutory provisions, making it a crucial reference for similar future cases. The decision reinforces the principle that trusts established for charitable objectives can engage in business activities without losing their tax-exempt status, provided that the income is applied for those objectives. The ruling is vital for legal practitioners, tax consultants, and organizations operating under charitable trusts, as it delineates the boundaries of tax obligations and exemptions under the Income Tax Act. |
| Court |
Madras High Court
|
| Entities Involved |
Not available
|
| Judges |
Jagadisan,
Srinivasan
|
| Lawyers |
K.R. Ramamani,
Subbaraya Aiyar,
Sethuraman,
Padmanabhan,
S. Ranganathan
|
| Petitioners |
Thiagesar Dharma Vanikam
|
| Respondents |
Commissioner of INCOME TAX
|
| Citations |
1963 SLD 88,
(1963) 50 ITR 798,
(1964) 9 TAX 137
|
| Other Citations |
Charitable Gadodia Swadeshi Stores v. CIT [1944] 12 ITR 385 (Lah.),
CIT v. Radhaswami Satsang Sabha [1954] 25 ITR 472 (All.),
J.K. Trust v. CIT [1958] 33 ITR 32 (Bom.),
Trustees of the Tribune, In re [1939] 7 ITR 415 (PC),
Dharma Vijaya Agency v. CIT [1960] 38 ITR 392 (Bom.),
CIT v. Krishna Varier [1962] 44 ITR 828 (Ker.),
Dharmodayam Co. v. CIT [1962] 45 ITR 478 (Ker.)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
11
|