High Court Of Allahabad
CIT vs. Smt. Comilla Mohan
Section 4
Asst. Years 1977-78, 1978-79, 1979-80
R.K. Agrawal & Vikram Nath, JJ.
IT Ref. No. 53 of 1999
12th January, 2007
Counsel Appeared
S. Chopra, for the Revenue
JUDGMENT
By the court :
The Tribunal, Allahabad Bench, Allahabad, has referred the following two questions of law under s. 256(1) of the IT Act, 1961, for the opinion of this Court:
“1. Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the assessee’s trusts were validly created trusts, when the sole beneficiaries of these trusts were neither in existence nor were identifiable at the time of creation of the trusts ?
2. Whether, on the facts and circumstances of the case, the Tribunal was justified in confirming the CIT(A)’s decision holding that the dividend income arising out of 60,000 shares of Mohan Meakin Ltd. transferred by the assessee to two trusts could not be validly included in the hands of the assessee ?”
2. The reference relates to the asst. yrs. 1977-78, 1978-79 and 1979-80.
3. Briefly stated the facts giving rise to the present reference are as follows : Smt. Comilla Mohan created two trusts known as first son of Vinay Mohan and the first son of Hemant Mohan dt. 18th Feb., 1973, and 22nd May, 1973, respectively, by transferring 60,000 equity shares of Mohan Meakin Ltd. As per the Department’s stand, these two trusts were not validly created as the sole beneficiary of each of the two trusts was neither in existence nor identifiable at the time of the creation of these trusts. Due to creation of these trusts the assessee did not show the dividend income on the above shares in her returns of income. Hence, the Department took action under s. 147(a)/148 and added the dividend income on these shares in the hands of the assessee.
4. Aggrieved, the assessee filed appeals before the CIT(A), who allowed the same and deleted the dividend income from the assessment made in the assessee’s hands, following the Tribunal’s decision dt. 20th April, 1989, in ITA No. 1250/All/1986 for the asst. yr. 1983-84.
5. The Department filed second appeals before the Tribunal for the assessment years under consideration and took the plea that the Department’s reference applications having been allowed by the Tribunal in RA No. 441/All/1987 dt. 26th Feb.,1988, the matter is still sub judice before the Allahabad High Court. The Tribunal, however, dismissed the Department’s appeals for the assessment years under consideration on the ground that the High Court’s decision was not available.
6. We have heard S. Chopra, learned standing counsel for the Revenue.
7. We find that identical questions came up for consideration by this Court in WT Ref. No. 150 of 1988, CWT vs. Rakesh Mohan (2007) 289 ITR 308 (All), decided on 17th Jan., 2005. This Court has answered both the questions in favour of the assessee and against the Revenue.
8. Respectfully following the aforesaid decision, we answer both the questions referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. There shall be no order as to costs.
[Citation : 289 ITR 310]
