MEHTA JAISING CONSTRUCTION, THROUGH MR. VIJAYKUMAR DHIRAJLAL MEHTA, MUMBAI. vs THE ASST. COMMISSIONER OF INCOME-TAX ,CIRCLE-19, MUMBAI.

Judgment text excerpt

401-ITXA-3838-09.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (IT) NO.3838 OF 2009 Mehta Jaising Construction ...Appellant Versus The Asst. Commissioner of Income-tax, Circle-19(1), Mumbai ...Respondent Mr. Vipul B. Joshi a/w. D. H. Hariya, Mr. Prashant Ghumare for the Appellant. Ms. Mamta Omle for the Respondent. CORAM: ALOK ARADHE, CJ. & M. S. KARNIK, J. DATE: 3rd APRIL, 2025 ORAL JUDGMENT: (PER CHIEF JUSTICE) 1. This Appeal under Section 260A of the Income Tax Act, 1961 (the Act) has been filed by the Assessee. The subject matter of the Appeal pertains to the Assessment Year 2003-2004. The Appeal was admitted on the following substantial question of law: “Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the status of the Appellant Trust was that of Association of Persons and thus the lower authorities were justified in disallowing interest of Rs.9,40,686/- paid to the beneficiaries under Section 40(b) of the Income Tax Act, 1961 ? 2. The facts giving rise to filing of this Appeal, in nutshell, are that during the material time Mehta Jaising Construction was constituted as a Private Specific Trust which was settled on 24/1/2000 by Ms. Indira B. Jaising. Six trustees were entrusted to execute the object of the Trust for the benefit of 34 beneficiaries, which included minor beneficiaries, rsk 1 401-ITXA-3838-09.doc whose legal guardians were not the trustees. The assessee has been filing the return of income regularly in the status of an Association of Persons. The assessee, for the Assessment Year 2003-2004, filed the income as an Association of Persons and declared the income of the assessee as “Nil”, as the current year’s income was set off against the