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1960 (12) TMI 8 - SC - Income TaxWhether, on the facts and in the circumstances of the case, the payment of dividend income to the assessee's wife, Ena Mitter, under the covenant in the deed of assignment dated January 19, 1953, was merely a case of application of the assessee's income ? Held that:- The true position is that if a person longer his alienated or assigned the source of his income so that it is no longer his, he may not be taxed upon the income arising after the assignment of the source, apart from special statutory provisions like section 16(1)(c) or 16(3) which artificially deem it to be the assignor's income. But if the assessee merely applies the income so that it passes through him and goes on to an ultimate purpose, even though he may have entered into a legal obligation to apply it in that way, it remains his income. This is exactly what has happened in the present case. High court correctly answered the third question against the assessee. Appeal dismissed.
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