Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 1994 (4) TMI HC This

  • Login
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

1994 (4) TMI 55 - HC - Income Tax

Issues:
1. Whether the assessee had a contingent interest in the trust and no income accrued?
2. Whether the Income-tax Appellate Tribunal was justified in deleting the addition of Rs. 12,000 made by the Income-tax Officer?

Analysis:
1. The case involved a trust created by the former ruler of Mewar State, where the assessee, a beneficiary, had a 1/2 share. The Income-tax Officer assessed the interest income of Rs. 12,000 credited to the assessee as assessable income. However, it was argued that the interest was contingent as it was to be accumulated until the appellant's marriage, at which point the amount would be paid to her. The Appellate Assistant Commissioner found that the appellant had only a contingent interest and no income had accrued to her until the contingent event of marriage occurred. The Gujarat High Court precedent supported this view, stating that income contingent on an event does not accrue until the event happens. The Income-tax Appellate Tribunal upheld this position, noting the lack of evidence produced by the Revenue to rebut the contingent nature of the interest.

2. The High Court, after considering the facts and legal precedents, affirmed the Tribunal's decision that the assessee had only a contingent interest in the trust, and no income had accrued to her. The court emphasized that without evidence to the contrary, the finding of a contingent interest could not be disturbed. As the Revenue failed to provide evidence to challenge the contingent nature of the interest, the Tribunal was justified in deleting the addition of Rs. 12,000 made by the Income-tax Officer. Therefore, the court answered the reference in favor of the assessee and against the Revenue, upholding the decision that no income had accrued to the assessee due to her contingent interest in the trust.

 

 

 

 

Quick Updates:Latest Updates