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TMI Blog1926 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of the students upon (1) the production of a series of printed lectures on the laws of India and Burma and (2) the encouragement of aquatic sports and the establishment of a Boat Club for the University. To his credit it may be mentioned that Mr. Eggar has carried out the condition of his appointment. The Commissioner of Income-tax in his statement admits that each month on drawing the salary attached to the appointments of Law Lecturer and Professor of Law, Mr. Eggar paid these amounts into a separate account, and that the moneys in question have been devoted to the purposes of the University Boat Club. But the Commissioner was of the opinion that the moneys came into the hands of Mr. Eggar in propria persona and was not paid to the trust. For that opinion he gave these reasons : (i) that Mr. Eggar had not executed a deed embodying the terms of the proposed trust ; and (ii) that section 5 of the Indian Trusts Act, 1882, lays down that to make a valid trust of moveable property it is necessary either to execute a deed and register it, or in the case of a verbal trust to hand over the property to the trustee. It is true that Mr. Eggar has not executed a trust deed. He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be brought within its exemption. It therefore seems hard that the trust money itself will not be exempted and unless and until this clause is amended to include such trust property that hardship must continue. The learned Judges of the Allahabad High Court who decided a similar reference by the Commissioner of Income-tax of the United Provinces in In the matter of Messrs Lachman Daj Narain Das 1 ITC 378, held a similar view. In that case a certain portion of the profits of a registered business firm was allocated to charitable purposes. The learned Judges held that the portion thus allocated could, in no sense, be treated as income derived from property held under trust or legal obligation. So my answer to the question referred will be that the remuneration in question cannot be brought within the exemption of that clause but is taxable as salaries under section 6 of the Income-tax Act. Cunliffe, J.-I concur. In my opinion this assessment should be upheld but on a technical point and a technical point only. In the month of December 1922, the respondent, Mr. Eggar, was occupying the dual position of Assistant Government Advocate and Secretary to the Legislative Assembly. On the 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposals to deal with the emoluments, but this Committee is not really concerned with the manner in which the lecturer spends his salary." That, indeed, appears to have been all that ever was done in the matter of establishing a trust ; presumably, however, the young Burmans received their preliminary tuition in rowing and aquatic sports and no doubt Mr. Eggar's lectures were printed and available to those who wish to profit by their perusal and study. On the 3rd May 1926, Mr. Rodriguez, Income-tax Officer, Salaries, assessed Mr. Eggar, who, by this time, had become Government Advocate of the Province, for income-tax and among the items of Mr. Eggar's annual income he included ₹ 7,299 allowances as Professor and Law Lecturer. On the 17th May 1926, Mr. Eggar petitioned against the assessment, alleging that the sum of ₹ 7,299 mentioned above was not part of his annual income, but was the income of a trust for the benefit of the students of Rangoon University. He put forward an appeal against the assessment on the 17th May, in which he elaborated his standpoint on the same lines contained in his petition ; and he added that he only accepted the post of Profess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e University and myself subject (where necessary) to the final decision of the Chancellor of the University." At the hearing Mr. Eggar contended through his learned counsel that effect should be given to his intention on an equitable principle which is laid down in the well-known English Chancery case of Holroyd v. Marshall 33 LJ 193. That case is an authority for the equitable doctrine that on a contract agreeing to make a transfer of property, the beneficial interest in that property is immediately passed to the transferee provided the contract is one of which a Court of Chancery would decree specific performance. I am inclined, however, to think that the principle laid down in Holroyd v. Marshall 33 LJ 193 and in the long line of English and Indian cases which have followed its decision, cannot be applied in the present case. The maxim in equity which considers as done that which ought to be done is almost invariably applied to cases in which some default or fraud has taken place for which reason the assistance of the Court is asked. I am much more inclined to regard the whole of this transaction as being nothing more or less than executory trust. The deposit of the draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application thereto." And sub-paragraph (2) of the same sub-section runs : "Any income of a religious or charitable institution derived from voluntary contributions and applicable solely to religious or charitable purposes." It is with a good deal of regret that I am unable to hold that Mr. Eggar's gift comes within the ambit of either of these paragraphs. Paragraph (2) obviously does not apply as the income there mentioned is of course the income, once it is in their bands, of the charitable or religious institutions. As to paragraph (1), in my view the trust would fulfil all the requirements laid down were it derived from property. The legal definition of personal property is a very wide one. It has been held to apply to debts, in certain circumstances, to choose in action of all kinds, to copyrights, to patents, to debentures and even to Government annuities, but I cannot think that even this wide interpretation can include the right to a future salary. It is true that Mr. Eggar, having regard to his covenant with the Chief Secretary, received his salary and his position in a fiduciary capacity alone, but, as that salary was not income derived from proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... niversity became the income of a trust from the time that he undertook his duties under the University and were never in fact his income. Before us it has been argued on behalf of Mr. Eggar that under the circumstances there is a trust and that he received the money as agent of the trust and as trustee thereof himself. From the statement of facts drawn up by the Commissioner of Income-tax it appears that each month, on drawing the salary attached to the appointments of Law Lecturer and Professor of Law, Mr. Eggar paid these amounts into a separate account and that the monies in question have been devoted to the purposes of the, University Boat Club. Under these circumstances it is to my mind clear that the money was the personal income of the assessee and only became trust money, if at all, when paid into the separate account for the purposes of the boat club. The exemption set forth in sub-section (3)(1) of section 4 of be Act has no application since the emoluments in question are not income derived from property held under trust or other legal obligation wholly for religious or charitable purposes. Mr. Eggar accepted the office of Law Lecturer and Professor under the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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