1953 (8) TMI 26 - HC - Income Tax

Summary

Issues:
1. Whether the sum received by the assessee was his professional income or money received on behalf of a trust.
2. Whether a trust was created with the money received by the assessee.
3. Whether the sum received by the assessee should be considered as his income for tax purposes.

Analysis:
1. The case involved a question of whether the sum of money received by the assessee, an Advocate, was his professional income or money received on behalf of a trust. The Income-tax Appellate Tribunal held that a voluntary trust was created, and the sum was received on behalf of the trust and not as the individual's income. The Tribunal deleted the sum from the assessment based on this finding.

2. The trust deed executed by the assessee clearly outlined the conditions under which the money was received, stating that it was for charitable purposes and to create a public charitable trust. The Tribunal concluded that the money was never the income of the assessee and that a trust was created, which was subsequently reduced into writing.

3. The judgment referred to legal principles stating that a trust can be created by any language showing the intention, and no technical words are necessary. The sum received by the assessee was deemed to be for the purpose of creating a trust, establishing a fiduciary relationship and making it the subject of a trust in equity.

4. The judgment cited precedents and legal definitions of trusts to support the conclusion that the sum received by the assessee was not his income but was received on behalf of a trust. The judgment highlighted that the money was received with the express condition of being utilized for the purposes of a public trust, making it subject to trust laws.

5. The judgment also referred to a case where a decree diverted income from an individual to another party, similar to the situation in the present case. Based on these legal principles and precedents, the judgment concluded that the sum of money received by the assessee was not his professional income but was received on behalf of a trust and not in his capacity as an individual.

6. Both judges, Falshaw and Kapur, concurred with the opinion that the sum received should not be considered as the professional income of the assessee but was received on behalf of a trust. The judgment provided a detailed analysis of trust laws, legal definitions, and precedents to support this conclusion.