R. JAYASIMHA BABU, J.

The questions referred to us at the instance of the Revenue are,

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal has rightly held that the activity of the assessee relating to the exploitation of film distribution rights and realisation of income therefrom is not 'business activity' ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal has rightly held that the activity of the trust relating to the exploitation of film distribution rights and realisation of income therefrom is a business carried on by the assessee trust in the course of actual carrying out of the primary purpose of the trust, and the provisions of s. 13(1)(bb) of the Act, 1961 are not applicable to the case ?

(3) Whether, on the facts and in the circumstances of the case, the Tribunal has rightly held that the income realised by the assessee-trust by exploitation of the film distribution rights is part of the corpus of the trust and not 'income' under s. 2(24) of the IT Act, 1961 ?"

The assessment years are 1977-78, 1978-79 and 1979-80.

2. The assessee is a trust constituted under a deed of trust dt. 29th November, 1972. The trust i