1968 (8) TMI 43 - HC - Income Tax

Assessee owned two houses both of which were self occupied. The assessee claimed a reduction in the annual value in respect of these houses - allowability of claim - further any income of a trust which is received for the benefit of the wife or the minor child is to be included in the total income of the assessee

Summary

Issues:
1. Inclusion of amounts received by assessee's minor daughter under trust deed in assessee's income.
2. Entitlement to reduction of annual letting value of properties under section 9(2) of the Income-tax Act, 1922.

Analysis:
1. The case involved the question of whether amounts received by the assessee's minor daughter under a trust deed should be included in the assessee's income. The trust deed directed the trustee to distribute income to the children of the settlor, with the corpus of the trust property to be held for the successor of the settlor. The Appellate Assistant Commissioner held that the income should be added to the assessee's income under section 16(3)(b) of the Act, as the assets did not remain the property of the assessee post the trust deed execution. The Tribunal upheld this decision, citing relevant case law like Tulsidas Kilachand v. Commissioner of Income-tax and In re Dr. T. M. A. Pai. The contention that section 16(3)(b) should only apply if assets were transferred solely for the benefit of the wife or minor child was rejected, as per Commissioner of Income-tax v. Mahomed Yusuf Ismail and Baidya Nath De v. Commissioner of Income tax. The Tribunal ruled in favor of including the income in the assessee's total income.

2. The second issue pertained to the reduction of the annual letting value of the Faridkot House in Diplomatic Enclave, New Delhi. The assessee sought a deduction of Rs. 1,800 for both properties under section 9(2) of the Act. The Appellate Assistant Commissioner held that the reduction could only be allowed once as the houses were considered one unit for computation of annual letting value. The Tribunal upheld this decision, rejecting the claim for a similar reduction for the property in Diplomatic Enclave. The contention that the first proviso allowed for the benefit in respect of more than one residential house occupied by the assessee was dismissed, and the Tribunal answered the question in the negative.

In conclusion, the High Court upheld the Tribunal's decision, finding no merit in the contentions raised by the assessee's counsel. The inclusion of the amounts received by the minor daughter under the trust deed in the assessee's income was deemed appropriate under section 16(3)(b) of the Act. Additionally, the assessee was not entitled to a reduction in the annual letting value of both properties under the first proviso to section 9(2) of the Act. The judgment was delivered by Judges P. C. Jain and D. K. Mahajan, with the assessee directed to pay costs of Rs. 250.