TMI Blog1962 (8) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... the hands of the assessee trustees under section 9 of the Act? 2. Whether on the facts and in circumstances of the case the rent receivable by the Custodian of Evacuee Property can be considered to be a charge within the meaning of section 9(1)(iv) of the Act or whether it constituted an effective alienation at source? The assessee is a corporation created by a statute, viz, Sir Currimbhoy Ebrahim Baronetcy Trust Act, IV of 1913 (hereinafter referred to as Act IV of 1913), and has been all along assessed to tax as trustees of Sir Currimbhoy Ebrahim Baronetcy Trust in the status of an association of persons. The income of the assessee is from the immoveable property and Government securities and the question with which we are mainl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee Property, and assessed the income from the said two properties as income of the assessee under section 9 of the Act. The assessee appealed to the Appellate Assistant Commissioner against the order of the Income-tax Officer. The appeal was allowed and the Income-tax Officer was directed by the Appellate Assistant Commissioner to delete the income of the said properties from the income of the assessee. The department then filed an appeal before the Tribunal against the order of the Appellate Assistant Commissioner. The Tribunal accepted the department's contention that, although the interest of the evacuee had now vested in the Custodian, the ownership of the properties still continued to vest in the trustees and the income of the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuee Property, the income from these properties was assessable in the hands of the trustees. The vesting of the said interest of the Baronet in the Custodian, in our opinion, could not in any way affect the said position. Mr. Mehta has argued that, under the provisions of the Administration of Evacuee Property Act, 1950, on the vesting of the interest of the Baronet in the Custodian, the Custodian was invested with the power of letting out the properties and turn them to income. According to him, therefore, the right to obtain income from the property now belonged to the Custodian and the trustees' power to turn the property to account was gone. It should, therefore, be held that income from the property would no longer be income assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas, in the other case, it was under the terms of a trust deed executed by the testatrix under the testamentary trust. In our opinion, therefore, the Tribunal was right in the view that it has taken and our answer, therefore, to the first question raised on this reference must be in the affirmative. We answer it accordingly. The second question raised on the reference requires two questions to be answered. Firstly, whether the rent receivable by the Custodian of Evacuee Property in respect of the said properties can be considered to be a charge within the meaning of section 9(1)(iv) of the Income-tax Act and, secondly, whether it could be regarded as income effectively alienated at the source and, therefore, not income assessable in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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