TMI Blog1973 (2) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 41(1) of the Indian Income-tax Act, 1922 ? " The assessee in this case are the trustees to the estate of late Tarun Kumar Roy. The assessment years involved are 1959-60, 1960-61 and 1961-62. For the first assessment year the previous year is the broken period starting from the date following the death of the creator of the trust, that is, 21st of Pous, 1365 B.S. (7-1-59) to 31st of Chaitra (13-4-59) and for the subsequent two years the previous years are the Bengali years 1366 and 1367. By a deed dated 19th of July, 1957, Tarun Kumar Roy transferred several house properties, bustees, landed properties in Calcutta and settled them on trust for the future benefit of his wife and children. It would be relevant in view of the question referred to mention the relevant clauses of the said trust deed. The settlor after appointing himself as the first trustee and making the subsequent appointment of trustees after his death provided, inter alia as follows : " (1) The sum of Rs. 500 (rupees five hundred) per month to the settlor's said wife, Smt. Surama Sundari Roy, during her life without any abatement, deduction or diminution, for and towards the maintenance of herself and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the marriage of the said Smt. Sabita Rani Roy, alias Lakshmi, the said portion of and in the premises No. 43B, Bonamali Sarkar Street, shall be held and managed by the succeeding trustees in the same manner as other properties comprised in the trust estate, and as hereinafter expressed. (5) That if at any time hereafter, during the subsistence of the trust, created by these presents, any male child or male children is or are born to the settlor by his said wife, then and in that event the succeeding trustees shall transfer and convey the properties comprised in the trust estate for the time being in their hands amongst all the sons of the settlor including the son or sons hereafter born, in equal shares at the time of the distribution hereinafter expressly mentioned and declared. " During his lifetime, however, the settlor appointed himself as the sole beneficiary. After his death on the 6th of January, 1959, the question arose how the assessment should be made on the trustees. In the trust deed referred to hereinbefore it was provided that after the demise of the settlor his wife, Smt. Surama Sundari Roy and his three sons, Sri Arun Kumar Roy, Sri Barun Kumar Roy and Sri Basud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te beneficiaries to the trust. Accordingly, the Tribunal was of the opinion that the first proviso to section 41 could not be applied. Upon this the aforesaid question has been referred to this court. In respect of the assessment years 1959-60, 1960-61, 1961-62 and 1962-63, the Tribunal had referred to this court in I.T. Ref. No. 86 of 1966 the question whether on the construction of the deed of settlement the Tribunal was right in holding that the monthly allowance which was payable to the settlor's wife should be separately assessed in the hands of the trustees as an amount specifically receivable by her under section 41 of the Indian Income-tax Act, 1922 and should, therefore, be deducted from the total income receivable by the trustees from the trust estate. This aforesaid reference came up for hearing before this court and by a judgment delivered on 5th October, 1972, we expressed the opinion that the Tribunal was right in its conclusion in the aforesaid case and that the monthly allowance which was payable to the settlor's wife was an amount specifically receivable by her under section 41(1) of the Indian Income-tax Act, 1922. In the instant case, we are concerned mainly wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in their representative capacity and section 41 would apply. The only dispute or controversy which was urged before us was whether the proviso to the said section would be applicable or not in the facts of this case so far as the income of the amounts to which the sons were entitled. The proviso would be applicable in two different contingencies. In the first contingency, if the income is received on behalf of any one specific person and his share is determinate then the proviso would apply but if the income is received on behalf of a plurality of persons or more than one beneficiary then this contingency does not happen. Even then the proviso might apply if the individual shares of the persons on whose behalf the income is received by the trustees are determinate and known. This is the second contingency. This position has been clearly explained in a judgment of this court in the case of Official Trustee of West Bengal v. Commissioner of Income-tax. Counsel for the revenue, however, contended that in this case the first contingency did not arise because neither the sum of Rs. 500 nor the other sums directed to be paid to the sons and other beneficiaries were received on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be deducted from the total income of the trustees. This conclusion of ours is also in consonance with the decision reached by us in I.T. Ref. No. 86 of 1966. The aspect, however, which requires consideration is whether in respect of other income it is possible apply the proviso. In respect of these other income it is also undisputed that the first contingency contemplated by the proviso does not apply. That is to say, it could not be said that this income was received on behalf of any one person. These undoubtedly were received on behalf of any one person. These undoubtedly were received on behalf of a plurality of persons. Therefore, the facts of this case do not cover the first contingency contemplated. But the second contingency that requires consideration is whether the individual shares of persons on whose behalf income was received for the year in question was indeterminate or unknown. It is true that these incomes were received on behalf of persons more than one. The question only is whether individual shares are determinate or known. It has to be further reiterated that we are concerned with the facts as in the relevant assessment years. The question, therefore, is, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interest in the corpus or the surplus of the estate in respect of which the vested interest is created, but that is not determinate or definite until the happening of the contingencies or the exhaustion of the trust or until the time of distribution comes. Therefore, in the years in question the shares that were received by the trustees in question on behalf of the sons or other beneficiaries could not be said to be determinate or known. In the aforesaid view of the matter, we are of the opinion that so far as the income other than the monthly allowance of the settlor's wife is concerned it could not be said that in these assessment years with which we are concerned the trustees received these amounts on behalf of persons whose " individual shares " were determinate or known. We, therefore, answer the question referred to us by stating that on the correct construction of the trust deed dated July 19, 1957, and on the facts and circumstances of the case as prevailing in the years of assessment the maximum rate could not be applied under the 1st proviso to section 41 of the Indian Income-tax Act, 1922, so far as the monthly payment of Rs. 500 to Smt. Surama Sundari Roy is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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