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TMI Blog1948 (3) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee that there was an oral trust prior to the execution of the trust deed but that contention was overruled and the Tribunal found as a fact that there was an oral trust in December 1940. The question that arises is whether the income received from these securities is exempt from tax or not. The deed of trust contains a clause, clause 10, which enables the settlor to revoke this trust, either wholly or partially, and it is common ground that the oral trust made by the assessee in December 1940 was also subject to this power of revocation. It is contended by the Advocate-General on behalf of the Department that under Section 16(1)(c) the income which is derived from these securities is deemed to be the income of the assessee. Alth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempting sub-section only deals with the actual income and not artificial income. Therefore, according to the Advocate-General, although the assessee may be charged under Section 4 on the income both actually received by him as also the income artificially deemed to have been received by him under Section 16(1)(c), when it comes to exemption under Section 4(3) the only income which can be exempted is the income actually received by the assessee. There is no doubt in this case that the income which the assessee says should not be charged is derived from property held in trust or under a legal obligation wholly for charitable purposes. The question only is whether that income has been received by the assessee. Now it is impossible to put upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome which is mentioned in Section 4(3) is not made chargeable to tax and to which the Act is not made applicable. Therefore in our opinion the Tribunal was right in deciding that the income which was derived from the securities settled on this trust was not liable to tax. The other contention raised by the Advocate-General is whether this particular trust is a charitable trust at all. The argument advanced by the Advocate-General is that it is not open to a Parsi in India to make a revocable trust of personalty for a charitable purpose. Now it is well-established that a Parsi has no personal law which governs him in British India and he is either governed by the statutory law of this country or in the absence of statutory law he is gov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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