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TMI Blog1970 (3) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... under : " 2. The executors and trustees appointed by my said will and hereinafter referred to as my trustees shall divide all the rest and residue of my estate wheresoever situate or treat the same as divided into two equal moieties and shall hold the said moieties upon the respective trusts hereinafter declared with regard to them respectively : .... (d) My trustees shall pay the net income of the other of the said moieties to my son, Dady, until his death or until he shall do or suffer any act or thing the effect of which would be to vest his right to the said income in any other person or persons but for this present provision or to divest him of the said right ; (e) From and after the happening of any of the events terminating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eleased unto the releases and their respective heirs, executors, administrators and assigns in equal shares. " At the date of this release the assessee had three children, but only one of them, a son named Sheryar, was a minor. The revenue sought to include the income from the trust coming to the share of Sheryar after the deed of release in the assessable income of the assessee on the basis of the provisions contained in section 16(3)(a)(iv) contending that the deed of release was really a transfer by the assessee of his interest under the trust to his minor son, Sheryar. The Tribunal has upheld that contention of the revenue. The question of law referred is : " Whether, on a proper construction of annexure 'A' there was a transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son may follow as a matter of law, but not by reason of the release effected by the releasor. In a transfer, however, the transfer from the transferor to the transferee takes place by reason of the transfer. The distinction is too clear and has been established for a very long time to need any further elaboration. Mr. R. J. Joshi, the learned counsel for the revenue, however, drew our attention to a decision of this High Court in Commissioner of Income-tax v. Dadabhoy G. Broacha. Each case must, however, turn on the facts of each case, and particularly the words used in the document said to be the document of release. In the document in that case the operative words were " the assignor doth hereby release, surrender, assign and transfer by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... events terminating the assessee's right to the income. If the release were to be treated as a transfer, the effect would be that the moment the assessee executed the deed of release, his interest under the trust would immediately cease under the provisions of sub-clause (d) of clause 2 and his children's right under sub-clause (e) would immediately get accelerated which right the children would have otherwise acquired only upon the death of the assessee. So, even if the deed of release is held to be a transfer, the right in favour of the assessee immediately came to an end and his children became entitled to that right, not by reason of the transfer, but independently by reason of the provision in their favour contained in sub-clause (e). I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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