TMI Blog1934 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the trust or whether as regards the whole or any part of it they are not so liable on the ground that they are not beneficially interested. Certain complications, arising out of previous practice, which affected the case in its earlier stages, were got rid of by arrangement and need not now be noticed. The question so propounded was answered in the affirmative by the High Court in a judgment dated 18th August, 1931. This is an appeal by the trustees, an incorporated body. The Act incorporating them (Act IV of 1913) is described in its title as an Act for settling certain properties belonging to Sir Currimbhoy Ibrahim, Baronet, so as to accompany and support the title and dignity of a Baronet and for other purposes connected therewi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng been carried to the Sinking Fund and Repair Fund and the remaining 15 per cent. having been absorbed by rates, taxes and other outgoings. The taxing Act under which the question in this case arises is the Income Tax Act, 1922, as subsequently amended. By Section 2 of that Act assessee is defined as meaning a person by whom income-tax is payable and person by virtue of the General Clauses Act, 1897, Section 3(39), includes any company or association or body of individuals whether incorporated or not. Chapter 1 of the Act, containing Sections 3 and 4, is headed Charge of Income Tax. Section 3 as amended is as follows: Where any Act of the Indian Legislature enacts that income tax shall be charged for any year at any rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appurtenant thereto of which he is the owner...... Provisos to Section 8 relieve the assessee from income-tax on certain securities issued tax free, but by Section 16 these provisos do not apply in the computation of the total income of an assessee. By virtue of Section 14(2) and Section 16 the position is the same as regards dividends and shares of profits received from companies or firms whose profits have been taxed. Section 22(2) provides for a return of total income and Section 23(1) for assessment of the total income of an assessee and determination of the amount payable on the basis of such return. Provisions follow for the verification and, if necessary, correction of the figures returned. Chapter 9 of the Act is headed Super ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uper tax, nor for the purpose of any graduation of income-tax by reference to total income, the amounts of interest on tax free securities and of dividends and shares of profits already taxed. In the assessment in the present case the income of the appellants was assessed under three heads namely interest on tax free securities ₹ 1,02,390, interest on taxed securities (i.e., dividends already taxed), ₹ 20,223, property ₹ 69,182, totalling together ₹ 1,91,795. Income-tax was accordingly charged on ₹ 69,182 and super tax on the total ₹ 1,91,795. In the argument before their Lordships on behalf of the appellants it was in the first place attempted to support the broad proposition that these assessments we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessment must be put upon the trustee. An argument was also founded by counsel for the appellants upon Section 38(2), Income Tax Act (which requires trustees, guardians and agents to furnish the revenue officials upon request with a return of the names and addresses of their beneficiaries or principals) and upon Section 40 (which provides for the assessment of guardians, trustees and agents of incapacitated or nonresident persons). It was said that the existence of these provisions supported a construction of the Act which would exclude trustees in other cases. It is to be observed however, that similar provisions in the United Kingdom Income Tax Acts were before the House of Lords in Williams v. Singer and Lord Cave expressl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legal title is not the only thing that can ever be looked at, would make it true to say that any proportion of the interest is not receivable or any proportion of the property is not owned by the incorporated trustees. The whole income and every part of it is charged with the provision of the sums necessary to maintain the Sinking Fund and Repair Fund and to pay the outgoings and it is not until those liabilities have been met thereout by the corporation that the Baronet is entitled to what remains and then simply as so much money. It was suggested that if the appellants are to be assessed, as has been done, it will result in double taxation, because the Baronet will also be liable to be assessed on what he receives from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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