(Appeal from. the judgment and order, dated January 29, 1981 of the Madras High Court in Tax Cases Nos.1240 to 1245 of 1979 and T.C.M.P. No.833 of 1981).

Income-tax---

----Charitable purposes--Charitable trust-Exemption ---Assessee---Trust giving money to college run by registered charitable society---Amount given by making credit entries in favour of society in its accounts---No challenge to genuineness of credits---Amounts representing credits was entitled to exemption---Indian Income Tax Act, 1961, S.11.

Held, dismissing the appeal, that the question herein was essentially a question of fact. A college was run, not by the assessee-trust, but by another registered charitable society. The High Court had found that the conduct of the educational institution in drawing from the assessee-trust larger sums than what had been credited by the trust in. its favour in 1969-70 showed that it was fully aware of its credit with -the assessee- trust and the funds that had' been made available to it by the trust. It was no part of the Revenue's case at any point of time that the credit entries made in the assessee's books of account were not genuine or true or that they were mere make-believe or bogus. The Income-tax Officer .had not doubted the said entries and called upon the assessee to produce the accounts of the college. The High Court was right in holding that the assessee was entitled to exemption under section 11 of the Income Tax- Act, 1961.

CIT v. Thanthi Trust (1982) 137 ITR 735 (Mad.) affirmed.

K: N. Shukla, Senior Advocate (Manoj Arora and S. N. Terdol, Advocates with him) for Appellant.

G. L. Sanghi, Senior Advocate (V. Shangram and Vineet Kumar, Advocates with him) for Respondent.

JUDGMENT

The question arising herein is essentially a question of fact. After considering all the facts and circumstances of these cases, the High Court (see (1982) 137 ITR 735) has recorded the following finding (page773):

"Thus, on the material on record, we are not in a position to say that after making the credit entries, the assessee retained any control over the monies or any beneficial ownership therein. For the accounting year 1966-67 corresponding to the assessment year 1968-69, a sum of Rs.10,41,689.47 had been credited by the assessee in favour of the educational institution out of` which Rs.3,04,035 had been drawn by the said institution, and for the accounting year 1967-68 corresponding to the assessment year 1969-70, a sum of Rs.8,99,535 has been credited in favour of the educational institution and the educational institution has drawn Rs.16,71,500during that year. The conduct of the educational institution in drawing from the assessee-trust larger sums than what has been credited by the trust in its favour in 1969-70 shows that is was fully aware of its credit with the assessee-trust and the funds made available to it by the trust. If the amounts had been actuallyhanded over to the Aditanar College during the assessment years in question the assessee could claim the benefit of exemption under section 11 as the college has been established only for the educational purposes and no part of . its fund can be utilized for non-charitable purposes, and the Revenue cannot insist that unless the educational institution expends the amount donated by the assessee within the assessment year, the assessee cannot claim the benefit of exemption under section 11. "

The High Court also took into account the factual situation regarding the amounts credited to the account of the college from year to year and the withdrawals by the college. They are the following:

It appears that the Adityenar College was run, not by the assessee trust, but by another registered charitable society. In the circumstances, the High Court was right in the conclusion which it arrived at. It may also be mentioned that it is no part of the Revenue's case at any point of time that the credit entries made- in the assessee's books of account were not genuine or true or that they were mere make-believe or bogus. It is also not brought to our notice that the Income-tax Officer doubted the said entries and called upon the assessee to produce the accounts of the college and that the assessee failed to produce the same.

The appeals are dismissed accordingly. No costs.

M. B. A. /4251/FC Appeals dismissed.