9911796707
TMI Blog1973 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the settlor was desirous of settling the shares in question for the benefit of his daughter, Maithili, and her issue and in certain events for the benefit of his other children and their issue in the manner and subject to what was provided in the said deed. The material portion of the operative part of the said document provided that the trust property was to be held upon the following trusts : "A. Until the end of calendar year 1963 to accumulate the whole residue of such income of the trust fund and invest the same and the resulting income therefrom from time to time to hold such accumulation as an accretion to the capital of the trust fund and as one fund with such capital. The expression 'trust fund' in these presents shall inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed the decision of the Supreme Court under the corresponding provision of the Indian Income-tax Act, 1922, in the case of Commissioner of Income-tax v. Manilal Dhanji. In the said case it was held that since the provision that is to be found in clause (b) of section 16(3) of the Indian Income-tax Act, 1922, created an artificial liability to tax, it has to be strictly construed and that an assessee can only be taxed on the income of a trust created for the benefit of his minor child, if in the year of account the minor child derived some benefit thereunder. In the present reference which arises out of that order of the Tribunal, the following question of law has been referred to us: " Whether, on the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee by settling three sets of shares on trust, the first to be held for the benefit of a charitable trust for two years and thereafter absolutely for the first son; the second to be held for the benefit of a charitable trust for 12 years and thereafter absolutely for the second son; and the third to be held for the benefit of a charitable trust for 8 years and, thereafter, absolutely for the daughter of the assessee. There were other provisions in the said trust deed to which I do not think it necessary to refer. At the date of the creation of the trust, the sons of the assessee were of the ages of 16 and 6, and his daughter was 10 years old. The question which arose before the High Court as well as the Supreme Court was whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) as it stood prior to the 1964 amendment meant immediate benefit, and that, considering the trust deed before it as a whole, the shares in question could not be said to have been held for the benefit of the three minor children of the assessee "as on March 31, 1958, and March 31, 1959" and the question referred to the court had, therefore, to be answered against the revenue. Even Shah J. in the minority judgment concurred in the view that under section 4(1)(a)(iii) as it stood prior to the 1964 amendment, assets transferred for the immediate benefit of the assessee, his wife or minor children alone could be included in the net wealth of the assessee, though he differed from the majority in regard to the construction of the trust deed. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
