Per Balasubramanyam, JM - The question arising in this appeal is whether income of a nursing home which a Trust runs is business income for the sake of section 161(1A).

2. To narrate material facts: One Dr. B.K. Narayan Rao was an eminent opthalmologist and he had started a clinic by name Prabha Eye Clinic. His son-in-law (Dr. Krishna Murthy) and grandson (Dr. K. Ramamurthy) were/are also in the same medical line. To continue the clinic, his son, A.N. Rao, settled a trust by a document (regd.) dated 29-9-1978. An initial trust fund of Rs. 5,000 was contributed by him. The name of the trust is "Sri Lakshmi Trust". The beneficiaries of the trust are specified in clause 5 of the document. The trustees, initially appointed, are mentioned in clause 6. Various rights and duties of the trustees necessary for the purpose of carrying out the object of the trust were particularly described in the document. Among others, the trustees were empowered to run a nursing home to render professional service and to carry out such other activities relating thereto.

3. The trustees had accordingly functioned and the nursing home run by them came to acquire a distinction.

4. The impugned assessment pe