TMI Blog1970 (12) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Sri Sri Radha Govinda Jew ", in the status of an individual. For the assessment years 1954-55 and 1955-56 the assessments were made in the status of an association of persons. Before the Appellate Assistant Commissioner, it was contended that the properties had been dedicated to the deities and, as such, the income therefrom was exempt from taxation, and, in any event, the two deities, namely, Radha and Govinda, and not the trustees, should have been assessed individually. The Appellate Assistant Commissioner was of the view that upon construction of the terms of the indenture it was clear that the properties had been transferred to the, trustees who became the legal owners thereof and the income of such properties was, therefore, assessable in their hands under section 9 of the Indian Income-tax Act. The Appellate Assistant Commissioner directed however, that the assessment on the trustees should be made in the status of an association of persons. With regard to premises No. 3, Amherst Street, Calcutta, the contention before the Appellate Assistant Commissioner was that the income thereof should be excluded from assessment. It was stated that the settlor had given this hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of worship of the deities and for residence of the shebaits and their families, the income-tax authorities were justified in assessing the bona fide annual value under section 9. The Tribunal dismissed the appeal. The following questions of law have been referred to this court : " (1) Whether, on the facts and in the circumstances of the case, and on a proper construction of the terms of the trust deed, dated the 7th June 1926, the Tribunal was right in holding that by the said deed there was a transfer of property directly to the trustees ? (2) Whether, on the facts and in the circumstances of the case, and on a proper construction of the terms of the trust deed of 1926, the trustees were rightly assessed under section 9 of the Indian Income-tax Act, 1922 ? (3) Whether, on the facts and in the circumstances of the case, the bona fide annual value of the house at No. 3, Amherst Street, Calcutta, was rightly included in the assessment of the trustees ? " Mr. P. K. Pal, learned counsel for the assessees, has argued before us that in Hindu law the dedication to a deity is nothing but an expression of the pious purpose for which the dedication is designed. If, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause is repugnant to the first clause and the first clause will prevail. In other words, by this deed the deities and not the trustees became the owners of the properties and the respective incomes thereof. And the second clause should be treated as void. The last submission of Mr. P. K. Pal is that with respect to premises No. 3, Amherst Street, there were restrictions on letting out of some of the portions thereof and section 9 of the Indian Income-tax Act should not be made applicable to those portions. We are unable to accept the arguments advanced on behalf of the assessees in this reference. It seems to us that the indenture dated the 7th June, 1926, should be construed as a whole. The intention of the settlor is the guiding factor, and that intention has to be gathered from consideration or by conspectus of the entire provisions, of the document. In the recitals to the deed the settlor says : " Whereas the said donor is desirous of dedicating the said properties mentioned and described and set forth in Parts I, II and III of the said Schedule 'A' hereto annexed to the said idols or thakurs upon the trusts and for the purposes hereinafter declared and expressed of and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e beneficiaries are the deities. The trust properties have been specifically mentioned and these properties have been expressly transferred to the trustees. When we go through the document we find that the settlor has all along maintained a distinction between the English concept of trust which is embodied specially in sections 3 and 6 of the Trusts Act and the normal Hindu shebaitship. Upon construction of this document, therefore, we cannot but hold that under its provisions it is the trustees who became the owners of the properties. We do not think that the Privy Council's decision in Forbes v. Git is of any assistance to the assessees. In that case the appellant contracted with the respondents to carry out work in altering the respondent's restaurant. The contract by its first clause witnessed that in consideration of $3,000 payable by three instalments, the appellant agreed to furnish the materials and performed the services stated in the contract. Details of the work followed, and there was a final clause to the effect that the respondents were to pay to the appellant the value of the materials provided and labour done, each at 12 1/2 % over cost, whether that value exceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed only on the 17th March, 1958, and was registered on the 8th July, 1958. The Income-tax Officer held that ownership was not transferred until registration of the deed of conveyance. And during the accounting year in question the ownership remained vested in the assessee. He, accordingly, included the property's bonafide annual value in the assessee's total income. The Appellate Assistant Commissioner was also of the same view. The Tribunal, however, was of opinion that though the assessee remained the legal owner, the beneficial ownership passed to the purchaser on the 29th March,1956, and that under section 9 of the Indian Income-tax Act, 1922, the income from the property was assessable in the hands of the beneficial owner, that is, the purchaser, and not the assessee. This court has held : (i) that in the case of a sale of immovable property a registered document is necessary to give effect to the sale and the sale takes effect only from the date of execution of the document ; (ii) in Indian law beneficial ownership is unknown ; there is but one owner, namely, the legal owner, both in respect of vendor and purchaser, and trustee and cestui que trust ; and (iii) the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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