9911796707
TMI Blog1943 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... and D and their value is expressed to be about rupee nineteen lacs. The first trustee was the settlor himself and upon his death or retirement his son Ganendra Kumar Rai Chowdhury should become the trustee and upon his death or retirement the grandsons of the settlor indicated in the instrument. The son, Ganendra Kumar Rai Chowdhury, is the present trustee. The deed directed the trustee to collect the income from all the trust properties and out of the income he should pay the costs and charges on the business and realising the income and outstanding carry out the worship of the family deities in the same manner as the settlor had done up to the execution of the deed; maintain some specified educational institutions and a hostel on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor died in the year 1936. Until the Income-tax year 1939-40 two assessments were made upon the income, one in respect of the profits from the business, which as in the hands of the trustee, and the other in respect of the income from the other sources and investments which also were in the hands of the trustee. The first assessment was made upon the trustee as an individual and the second upon a Hindu undivided family. In the year 1940-41 all the income of the trust was included in one assessment and tax was levied at the maximum rate. This reference concerns the last assessment and the points for decision are whether the inclusion of the whole of the trust income in the assessment is correct and also whether this income is subject to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the present trustee is entitled to receive whilst acting as trustee, is not the sole benefit which he can demand under the trust. He is also entitled to be paid such sums in respect his own maintenance, medical expenses and the like as in his own discretion he may determine. In these circumstances in my view the interest of the cestui qui trusts are indeterminate. It is now convenient therefor to Section 41(1) of the Indian Income-tax Act, the material portions of which are as follows :- In the case of income, profits or gains chargeable under this Act which any...... trustee or trustees appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise..... are entitled to receive on be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so the provision of the proviso comes into operation and the tax which is leviable must be at the maximum rate prevailing during the year of the assessment. On behalf of the applicant it was contended that since Section 10 of the Act provides for tax being payable by an assessee under the head of profits and gains of a business, profession or vocation, there should be a separate assessment in respect of the business, profits in as much as no reference in made to business profits and gains in Section 41(1). Section 8 provides for the payment of tax by an assessee upon interest on securities. By Section 9 the assessee pays tax upon income from property. It was not suggested, in the course of argument, that there should be separate asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be made upon the entity of a Hindu undivided family. Particular reliance was placed upon sub-section (3) which is as follows :- Where such an order has not been passed in respect of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family. The provision can only relate to income, profits or gains from property belonging to a Hindu undivided family. The property, the subject of the present reference, is not such property, but it is the property of a trust. Further the beneficiaries of the trust are not only the members of a Hindu family, which may or may not be undivided, but also a school, a hostel and such other charities to which the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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