1962 (8) TMI 116

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..... ia executed a will, under clause 7 of which she left three properties solely for her grandson, J.B. Wadia. Under the said clause, the trustees appointed under the will were prohibited from selling the properties. On the 25th September, 1929, Lady Wadia executed a codicil, under which she gave power to the trustees to sell the properties and invest the proceeds in shares and securities. Under clause 24 of the will, power had been given to the trustees to invest moneys in their names in certain investments with power to vary the investments from time to time. Lady Wadia died on 14th April, 1930, and the will took effect on that date. The trustees, in pursuance of the power conferred upon them under the will, realised the properties and invest .....

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..... missioner accordingly held that an amount of ₹ 14,152 out of the surplus was only assessable to tax, the balance being in the nature of capital gain. Against this decision of the Appellate Assistant Commissioner, the assessee took a further appeal to the Tribunal. The Tribunal on the facts and in the circumstances of the case took the view that there was no proof of the trustees having had an intention to make a profit when they purchased the shares and that all that they did was to change the investments in the best interests of the trust as directed by the testator. According to the Tribunal, the entire amount of ₹ 27,811 was a capital gain and no part of it was income liable to tax in the assessment year 1955-56. It according .....

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..... by trustees, says the counsel, will be for a long period and, although they have power of varying the investments, the power will ordinarily not be very frequently exercised. On the record in the present case, we have variation in respect of only four blocks of shares. One block of shares had been held by the trustees since the year 1946 and the rest from the year 1951. The mere circumstance that the investments in three of the four blocks were disposed of within a period of three years or so would not, in our opinion, be sufficient to characterise the action as dealing in shares. It is next pointed out that the beneficiary has some dealings in shares himself and, since he is also one of the trustees and the investments are for hi .....

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