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TMI Blog1948 (3) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... special circumstances arise which in the opinion of the executors make it expedient to sell the business earlier. This business was to be carried on for a period not exceeding 12 months and then it was to be sold to one of his nephews, failing them to an outsider. The business was sold to one of the nephews on the 1st January, 1943, and the executors carried it on from the 10th April till that date. According to the assessees the succession to the business took place on the 1st January, 1943, when the business was sold to one of the nephews. According to the Commissioner the succession took place on the 9th April, 1942, when the testator died. Section 25(4) gives certain concessions to an assessee in respect of a business where tax has been paid under the provisions of the Indian Income-tax Act, 1918, and this concession is given when the business is discontinued or is taken over by another person. The language used in sub-clause (4) is:- Where the person who was at the commencement of the Indian Income-tax (Amendment) Act, 1939 (VII of 1939), carrying on any business, profession or vocation on which tax was at any time charged under the provisions of the Indian Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion' connotes a transfer of ownership and the person who succeeds another must have by such succession become the owner of the business which his predecessor was carrying on and which he after the succession carries on in such capacity, that is, the capacity as owner. With respect, I entirely agree with that view. But it is important to note in what connection and in what setting of facts this observation was made by Mr. Justice Madhavan Nair. In that particular case an undivided Hindu family was carrying on business and it was suggested that the surviving co-parcener of that undivided Hindu family had succeeded to the business of the family. Mr. Justice Madhavan Nair rejected that contention on the ground that the surviving co-parcener was himself the part owner of the business as a member of the joint family and therefore there was no transfer of ownership when he survived to that business. In this case there can be no doubt that there is a transfer of legal ownership. It may be that the executor is not the beneficial owner, but I do not read Section 25(4) to mean that it is only when a beneficial owner succeeds to the previous owner that a succession takes place within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to produce the yearly income of one thousand pounds that it could possibly be said that the executors hold the Government paper as trustees to pay the income thereout to the widow. But at the stage with which we are concerned, when Government promissory notes have not yet been purchased and all that the executors have done is to carry out the direction of the testator and pay the bequest to the widow, I fail to see how it could possibly be contended that this amount was received by the executors on behalf of the widow. It is not in discharge of any trust that the executors paid this amount to the widow; it is in the course of their administration of the estate which the executors were under an obligation to pay and therefore in my opinion the Tribunal was right in coming to the conclusion that Section 41 did not apply to the facts of this case. I would therefore answer question No. 1: 9th April, 1942, and question No. 2 in the negative. The assessee to pay the costs. TENDOLKAR, J.- This reference arises out of an assessment for the year 1943-44, the accounting period being the 10th April, 1942, to the 31st December, 1942. The assessees are the executors of the will of on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l happen that a business is purchased by trustees who are entitled to carry it on on behalf of beneficiaries. In that event, the trustees can well be the owners of the business, although the beneficial interest may be in the beneficiary. What is meant by ownership is, that in so far as complete control of the business is concerned, the person who succeeds should have all the indicia of ownership; and it has, to my mind, nothing whatever to do with beneficial ownership. Applying that interpretation to the facts of the case before us, the question is whether the executors succeeded to the business as owners. Under Section 211 of the Succession Act it is quite clear that the property of a testator vests in the executor. No doubt Section 211(1) says vests in him as such , but that can only mean that the beneficial interest in the property does not vest in the executor but the property vests in him as the legal representative of the deceased. None the less, the executor is the owner of the business subject to any beneficial interests that have been created by the will in that business. In my opinion, therefore, the executors succeeded to the business within the meaning of Section 25(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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