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TMI Blog1962 (8) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... in equal shares as tenants-in-common. Amongst the properties held under this trust, there were 1,000 shares of the B.E.S.T. Company Limited. The company went into liquidation and a sum of ₹ 35,000 was paid by the liquidators to the trustees in respect of the said shares. The B.E.S.T. Company, at the time when it went into liquidation, had certain accumulated profits and the amount of ₹ 35,000, which the trustees received, included a sum of ₹ 6,125 which represented a distribution out of the accumulated profits during the six previous years of the company preceding the date of liquidation. In the assessment of the assessee for the assessment year 1955-56, the Income-tax Officer, applying section 41 of the Indian Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard-to the provisions of section 3 and section 41(2) of the Act, and clause 3 of the deed of settlement dated March 28, 1928? The second question, which the Tribunal has referred to this court arises out of the assessee's assessment for the assessment year 1956-57 and arises in the following circumstances: The assessee's grandmother, Lady Aimai Wadia, had executed a will on the 26th January, 1929, which she had further modified by a codicil dated 26th September, 1929. Under the will as modified by the said codicil certain immoveable properties were allowed to be sold and converted into cash by the trustees and the proceeds directed to be invested in the investments specified in the will. The income from the said investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed and referred to this court the following question of law as arising out of its order: Whether the profit of ₹ 907 made by the trust on sale of shares was liable to inclusion in the assessee's total income for 1956-57 having regard to the provisions of the will and the provisions of section 41(2) read with sections 3 and 10 of the Act? With regard to the first question, it is undisputed that the amount of ₹ 3,122-8-0, included in the sum of ₹ 35,000, which was received by the trustees on the liquidation of the B.E.S.T. Company Limited in respect of the 1,000 shares in the said company held by them, was a dividend within the provision of section 2(6A)(c) and, therefore, income under the definition in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect of entitling the assessee to the said amount or enabling the trustees to treat it as a payment or sum which will be payable by them to the assessee. Under the trust deed the said part as also the rest totalling to ₹ 35,000 had to be treated as a part of the corpus. The amount of ₹ 3,122-8-0, therefore, could not be regarded as income, profits or gains receivable by the trustees on behalf of the assessee so as to make it assessable in his hands under section 41(2) of the Act. In our opinion, therefore, the Tribunal was right in the conclusion to which it has arrived and our answer to the first question, therefore, is in the negative. Coming now to the second question, the Tribunal has found that during the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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