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Issues Involved:
1. Interpretation of the term "property" in Section 4(3)(i) of the Indian Income-tax Act. 2. Applicability of Section 4(3)(ia) to business income of a charitable trust. 3. Whether the income derived from business by the trustees of the Charitable Gadodia Swadeshi Stores is exempt from income-tax. Issue-wise Detailed Analysis: 1. Interpretation of the term "property" in Section 4(3)(i) of the Indian Income-tax Act: The primary issue was whether the term "property" in Section 4(3)(i) includes trade or business held under trust. The court noted that "property" generally covers both movable and immovable assets, including cash, deposits, and securities. The court emphasized that there was no indication in the clause to suggest a restricted meaning of "property." It was argued that the term should be interpreted in its ordinary sense unless the legislature explicitly expressed a restricted intention. The court supported this interpretation by referencing the Income-tax Manual and previous judicial decisions, including the Privy Council's dictum in Commissioner of Income-tax, Bombay v. Currimbhoy Ebrahim & Sons Ltd., which indicated that "property" should be taken in its usual signification unless contextually restricted. 2. Applicability of Section 4(3)(ia) to business income of a charitable trust: The court examined whether the insertion of Section 4(3)(ia) affected the interpretation of "property" in Section 4(3)(i). It was argued that clause (ia) deals specifically with business income carried on behalf of a religious or charitable institution, without reference to trust, while clause (i) pertains to property held under trust. The court reasoned that the insertion of clause (ia) did not narrow the scope of clause (i) but rather added to the list of exemptions. The court emphasized that if the legislature intended to restrict clause (i), it would have done so explicitly. The court concluded that the two clauses addressed different matters and were not mutually exclusive. 3. Whether the income derived from business by the trustees of the Charitable Gadodia Swadeshi Stores is exempt from income-tax: The court considered whether the income derived from the Charitable Gadodia Swadeshi Stores was exempt under Section 4(3)(i). The court noted that the business was either held under trust or conducted on behalf of the Gadodia Charitable Trust. The court concluded that the income was covered by clause (i) of sub-section (3), thus exempting it from income-tax. The court emphasized that if the legislature intended to exclude such business income from exemption, it should amend the law accordingly. Judgment: The court answered the question propounded by the Income-tax Appellate Tribunal in the affirmative, thereby granting the assessee exemption from income-tax for the income derived from the Charitable Gadodia Swadeshi Stores. The court allowed the assessee full costs of the proceedings.
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