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TMI Blog1967 (12) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... income but as income derived by him as trustee from trust property. It appears that the assessee filed two returns-one in his own name, viz., Shri Durga Prosad More, declaring loss at Rs. 9,736 and the other in the name of Shri Durga Prosad More in the capacity of trustee to the estate of Sm. Benarasi Debi declaring total income at Rs. 34,380. It was stated by the representative of the assessee before the Income-tax Officer that the said house property should not be taxed in the hands of the assessee as it was a trust property but should be taxed separately. In the deed of sale dated 30th September, by which the aforesaid premises were purchased, the assessee has been described as a trustee, being a party thereto as of the fourth part. In the recitals we get the following assertions: " Whereas Sm. Benarasi, wife of the said trustee, has set apart and made over certain sums to the trustee to have and to hold the same upon trust for investing the same in immovable properties for the maintenance of herself during her lifetime with the rents, issues and profits thereof after payment of all outgoings and on her death to hold the same in trust for her sons....... for their maintenance d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his wife and the two sons and with the further obligation to utilize a part of the money towards purchase of some house property to be held in the same manner. Therefore, the documents clearly state that the assessee received the money from his wife subject to the trust aforesaid and that the money was the stridhan property of the wife. There is nothing in these two documents to indicate that the money really belonged to the assessee himself. The Income-tax Officer, however, treated the sum of Rs. 1,85,000 utilized for the purchase of the said house property as belonging to the assessee. He, therefore, treated the house property in question as the property belonging to the assessee. In other words, in the opinion of the Income-tax Officer, the wife is nothing but a benamidar of the assessee. Still, we do not find that any attempt was made by the Income-tax Officer to gather facts or materials in support of this conclusion. The only reason offered by the Income-tax Officer would appear from the following extract from the assessment order: I find from records that this property was purchased for a sum of Rs. 1,85,000 on September 30, 1940, in the name of Sm. Benarasi Devi and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the income of this house property year after year since the assessment year 1942-43. According to them he should not be permitted to say, in the absence of any positive evidence adduced by him, that the money with which the house property was purchased really belonged to his wife. It is well settled that in the case of benami, the onus is upon the department to prove that the person whose name appears in the document is merely a name-lender. The Appellate Assistant Commissioner made a feeble attempt to prove that the department had discharged the onus. He quoted a portion from the report of the Income-tax Officer made in connection with the assessment for the assessment year 1942-43. The portion quoted runs thus : " There is a separate set of accounts for this property and the accounts were closed on 30th September, 1941 . . . . The reason submitted by the assessee is that the assessee never considered this amount as his own but as belonging to his wife, Benarasi Debi. According to this submission as contended by the party it was her stridhan. Questioned as to how this stridhan was built up the party is unable to give any satisfactory explanation not to ownership. But he did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. In the deed of conveyance itself it is clearly stated that the money was received by him impressed with the trust and that trust necessarily was oral in nature. Therefore, the Tribunal is not correct in saying that " the case of the trust having been originally made orally therefore cannot stand." A reference may be made to section 92 of the Trusts Act in this connection. The said section runs thus : " Where a person contracts to buy property to be held on trust for certain beneficiaries and buys the property accordingly, he must hold the property for their benefit to the extent necessary to give effect to the contract." From the deed of conveyance it is clear that the assessee contracted to buy the property to be held in trust for the beneficiaries mentioned in the recitals of the said deed of sale. Therefore, in our opinion, apart from the deed of settlement created later on, he must be regarded as a trustee for the benefit of his wife and the two sons under the provisions of the Indian Trusts Act. We accordingly hold that there are no materials on record to support the finding of the Tribunal that the money with which the 'house property in question was purchased really ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iring an estimate to be made for a statutory purpose and by a statutory authority, the principle of estoppel cannot be invoked to render the provision nugatory in cases where such principles might otherwise have applied."' His Lordship in another place observed as follows: It is the amount of the assessment to be made upon the facts of the case before them that is determined by them . . . The High Court may reverse, affirm or amend the determination in respect of which the case has been stated or remit the matter to the Commissioners with the opinion of the court thereon. It is difficult to attribute to such a determination of an assessment in amount, the decision of a lis inter partes. " Mr. Ginwalla drew our attention to the following passage in the judgment of Lord Atkin in Commissioner of Income-tax v. P. R. A. L. Muthukaruppan Chettiar Counsel for the respondent pointed out that the contention of the Commissioner in this case was the contrary of that made by him in the previous case in Madras which was successful in the High Court. He protested strongly against the Commissioner in successive cases blowing hot and cold. But that is a privilege not confined to Commissioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive and in favour of the assessee. The assessee will get his costs from the revenue. P. B. MUKHARJI J.- I agree. The question requiring an answer from this court has two parts, one relates to the facts and circumstances and the other relates to the proper interpretation of the deed of conveyance and the deed of settlement. The question as framed is in these terms: "Whether, in the facts and circumstances of the case and on a proper interpretation of the deed of conveyance and the deed of settlement, the Tribunal is right in holding that the house property being premises Nos. 46A and 46B, Wellesley Street, Calcutta, is not trust property." So far as the interpretation of the deeds is concerned, there cannot, in my opinion, be any controversy whatever. The deeds are clear. The first is the deed of conveyance dated the 30th September, 1940. In this deed the vendors were the Kotharia in three parts who were conveying the property to the assessee, Durga Prosad More, expressly describing him as the " trustee ". No doubt the third party describing him as a trustee will not make him a trustee but the fact is that strangers and third parties took him as a trustee and treated h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties. The other part of the question relates to "the facts and circumstances of the case". Does the fact or the circumstance of the case lead to any conclusion contrary to what these two deeds record ? They do not. The admitted facts are, (1) there is no proof and no charge against the assessee that he had concealed any income of his own ; (2) there is no evidence whatever that the assessee as husband advanced this money to the wife and thereby concealed his own income ; (3) the assessee has throughout kept separate accounts of his own income and the income of the trust properties and has returned such income separately without any concealment or any evasion, and (4) the assessee when asked definitely produced before the taxing authorities both the sale deed as well as the trust deed to show that the properties in question were trust properties. The other compelling fact and circumstance of the case are that the assessee in previous years did protest and grumble against the taxing authorities' inclusion of the trust properties as his own property. He did make appeals to the Appellate Assistant Commissioners and Tribunals but he failed in those years. The fact remains that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew is taken by two other decisions in Ramkinkar Banerjee v. Commissioner of Income-tax and Sovaram Jokhiram v. Commissioner of Income-tax. Now what are the facts here. The assessee himself had said that the money belonged to his wife with which this property was purchased. No enquiry was made by the taxing authorities. The wife was not interrogated. No statement was called from the wife. No statement was called from the father-in-law. The deed itself shows that the wife was claiming this money as her stridhan property. Surely the income-tax authorities sought to discharge their onus in such a case by leaving the question to the husband and by only saying that they do not believe the husband's statement. There should have been enquiries and investigations by the taxing authorities and they were clothed with enough powers in that respect to enquire from the wife and the wife's father about the source of the money. This is particularly so when on the record there is no charge or allegation against the assessee-husband that he had concealed his income. No doubt in an appropriate case where the assessee purchased his property with his own money and for himself but benami, that is, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of trust and conveyance. The other question for decision in the present reference is one of res judicata. Highest judicial decisions and authorities, as I read them, are in favour of the conclusion that the finding or decision of the income-tax authorities in a previous year, is not res judicata generally and, therefore, may be departed from in any subsequent year. The well-known decision of Hanworth M.R. in Inland Revenue Commissioners v. Sneath is the leading authority on the point. The propositions are clear. If the department wrongly arrived at a certain finding in the past year and the assessee accepted it instead of taking the matter higher, that can give the assessee no claim to have the mistake repeated in a subsequent year in his favour. Equally, on the other side, the assessee may discover that in past years he had paid tax on an erroneous basis or had returned as income that which was not assessable as his income at all and such past practice would not debar him in any later year from making any return on a correct basis. The Privy Council decision in King v. British Columbia Fir and Cedar Lumber Company Limited is also relevant on the point. Lord Blanesburgh, deliver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stead's case further, beyond observing that some of the things that were said in that case are not, I think, entirely consistent with what was said in New Brunswick Railway Co. v. British and French Trust Corporation Ltd. or with what I regard as essential to a successful plea of res judicata, a common medium concludendi in the two actions." Finally in a still later decision in Mohamed Falil Abdul Gaffoor. The Trustees of the Abdul Gaffoor Trust v. Commissioner of Income-tax, Colombo, the House of Lords definitely refused to follow Hoystead's decision and Lord Radcliffe, delivering the judgment of the House of Lords at pages 600-601, observed: Their Lordships are of opinion that it is impossible for them to treat Hoystead's case as constituting a legal authority on the question of estoppels in respect of successive years of tax assessment. So to treat it would bring it into direct conflict with the contemporaneous decision in the Broken Hill case ; and to follow it would involve preferring a decision in which the particular point was either assumed without argument or not noticed to a decision, in itself consistent with much other authority, in which the point was explicitly rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken. The same principle of setting parties' rights to rest applies and estoppel occurs." Finally, at page 168 of the report, Lord Shaw observes: " It might be sufficient to say, in answer to the entire argument on this head, that whether the point as to joint ownership depended upon admission of fact upon evidence led or upon argument upon construction of a statute, that is, as already stated, nothing to the point in considering the question of estoppel. There would be no quieting of litigation unless the judgment was taken as it stands. It is plain that the res in the present case was adjudged, that res being, in figures, that six times 5,000l. should be the suitable deduction from the assessed property. This decision in Hoystead v. Commissioner of Taxation has to be understood in its proper light. There the judgment was the judgment of the High Court which set at rest the point of joint ownership. As Lord Shaw noticed at page 163 at the beginning of the judgment: " The parties treated the answers of the Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not binding and conclusive. " As against all these massive circumstances, facts, evidence and great authorities, we are unable to hold that the mere fact that the assessee did not carry his protests beyond the Tribunal to this court in previous years concludes this question of the real nature and character of the two deeds of conveyance and trust as res judicata in this case. It is necessary in these circumstances to have a total view of the matter which would include the statements made by the assessee, his conduct and the probabilities. Indeed as was so clearly pointed out by the Supreme Court in Uddhavdas Kewalram v. Commissioner of Income-tax, in these terms: " It is for the income-tax authorities to prove that a particular receipt is taxable. In deciding whether an item of receipt is taxable as income, the Tribunal may consider the evidence in the light of the statements made by the assessee, his conduct and the probabilities, but in arriving at its conclusion there must be a fair and reasonably full review of the evidence." Therefore, for these reasons, I agree with the answer proposed by my learned brother that the question raised must be answered in the negative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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