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TMI Blog1973 (2) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ars are the Bengali years 1366 and 1367. By a deed dated 19th of July, 1957, Tarun Kumar Roy transferred several house properties, bustees, landed properties in Calcutta and settled them on trust for the future benefit of his wife and children. It would be relevant in view of the question referred to mention the relevant clauses of the said trust deed. The settlor after appointing himself as the first trustee and making the subsequent appointment of trustees after his death provided, inter alia as follows : " (1) The sum of Rs. 500 (rupees five hundred) per month to the settlor's said wife, Smt. Surama Sundari Roy, during her life without any abatement, deduction or diminution, for and towards the maintenance of herself and that of Smt. Sabita Rani Roy alias Lakshmi until the marriage of the said daughter POVIDED HOWEVER that if the said Srimati Surama Sundari Roy dies before the marriage of Sabita Rani Roy, then and in that event the suceedings trustees shall pay Rs. 200 (rupees two hundred) only for and towards the maintenance, education and other expenses of the said Sabita Rani Roy alias Lakshmi until her marriage. (2) That the succeeding trustees shall hold and set apart the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then and in that event the succeeding trustees shall transfer and convey the properties comprised in the trust estate for the time being in their hands amongst all the sons of the settlor including the son or sons hereafter born, in equal shares at the time of the distribution hereinafter expressly mentioned and declared. " During his lifetime, however, the settlor appointed himself as the sole beneficiary. After his death on the 6th of January, 1959, the question arose how the assessment should be made on the trustees. In the trust deed referred to hereinbefore it was provided that after the demise of the settlor his wife, Smt. Surama Sundari Roy and his three sons, Sri Arun Kumar Roy, Sri Barun Kumar Roy and Sri Basudev Roy, would become the joint trustees in respect of the properties settled. The Income-tax Officer found that the trust deed did not provide for any definite share of the beneficiaries and, as such, he taxed the net income of the trust estate at the maximum rate under section 23(3) read with section 41 of the Indian Income-tax Act, 1922. Being aggrieved by the said order of the Income-tax Officer, the assessee filed appeals before the Appellate Assistant Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was payable to the settlor's wife should be separately assessed in the hands of the trustees as an amount specifically receivable by her under section 41 of the Indian Income-tax Act, 1922 and should, therefore, be deducted from the total income receivable by the trustees from the trust estate. This aforesaid reference came up for hearing before this court and by a judgment delivered on 5th October, 1972, we expressed the opinion that the Tribunal was right in its conclusion in the aforesaid case and that the monthly allowance which was payable to the settlor's wife was an amount specifically receivable by her under section 41(1) of the Indian Income-tax Act, 1922. In the instant case, we are concerned mainly with the amounts other than the amount mentioned before, that is to say, the monthly allowance payable to the settlor's wife. We have referred to the trust deed from wherein it would appear that after payment of the sum of Rs. 500 as monthly allowance under clause (1) the trust deed in succeeding clauses provided for the expenses for marriage of each of the settlor's two sons and beneficiaries, namely, Barun Kumar Roy and Basudev Roy, respectively, a sum of Rs. 8,000 eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviso would apply but if the income is received on behalf of a plurality of persons or more than one beneficiary then this contingency does not happen. Even then the proviso might apply if the individual shares of the persons on whose behalf the income is received by the trustees are determinate and known. This is the second contingency. This position has been clearly explained in a judgment of this court in the case of Official Trustee of West Bengal v. Commissioner of Income-tax. Counsel for the revenue, however, contended that in this case the first contingency did not arise because neither the sum of Rs. 500 nor the other sums directed to be paid to the sons and other beneficiaries were received on behalf of any one person and these were directed to be paid to a plurality of persons or beneficiaries. It has to be borne in mind that in order to satisfy the first contingency it is required that the income, profits or gains or any part thereof should be specifically receivable by the trustees on behalf of any one person. In this case, we find that the income in the hands of the trustees to the extent of Rs. 500 was receivable by the trustees on behalf of the settlor's wife, Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of any one person. These undoubtedly were received on behalf of any one person. These undoubtedly were received on behalf of a plurality of persons. Therefore, the facts of this case do not cover the first contingency contemplated. But the second contingency that requires consideration is whether the individual shares of persons on whose behalf income was received for the year in question was indeterminate or unknown. It is true that these incomes were received on behalf of persons more than one. The question only is whether individual shares are determinate or known. It has to be further reiterated that we are concerned with the facts as in the relevant assessment years. The question, therefore, is, can it be said in these assessment years that the individual shares of the persons on whose behalf the income had been received were determinate or known. In this case, we have to bear in mind that the section uses the word " share ". The word " share " in the expression definite share in section 41(1) of the Indian Income-tax Act, 1922, means and includes not only a definite fraction or proportion of income but a definite portion or part of the income. In this connection, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we are of the opinion that so far as the income other than the monthly allowance of the settlor's wife is concerned it could not be said that in these assessment years with which we are concerned the trustees received these amounts on behalf of persons whose " individual shares " were determinate or known. We, therefore, answer the question referred to us by stating that on the correct construction of the trust deed dated July 19, 1957, and on the facts and circumstances of the case as prevailing in the years of assessment the maximum rate could not be applied under the 1st proviso to section 41 of the Indian Income-tax Act, 1922, so far as the monthly payment of Rs. 500 to Smt. Surama Sundari Roy is concerned. But the maximum rate would be applicable under section 41(1) of the Indian Income-tax Act, 1922, so far as the rest of the income in the hands of the trustees is concerned. The Tribunal was not right, on the facts and circumstances of this case, and on the correct construction of the trust deed dated 19th July, 1957, in holding that the maximum rate of tax could not be applied in this case on the 1st proviso to section 41(1), Indian Income-tax Act, 1922. We must, however, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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