TMI Blog1944 (3) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... to his grandson Sat Prakash son of Tara Chand aged about 5 years. He further provided that if any other son was born to Tara Chand, he too would inherit along with his brother Sat Prakash. In paragraph 3 of the will, he appointed six persons for the management of his property presumably on account of the minority of the devices of his estate, but described them as ausiya which has been translated into English as executors. In paragraph 4, however, he clearly stated that after his death 6/16th of the whole of his movable and immovable property shall be owned by all the sons of Tara Chand. He further made it clear that he had prepared a separate list of all the movable and immovable property which shall fall to the share of each. In the course of the same paragraph he once more stressed the fact that after my death they shall be owners of their respective shares shown in the said list. In paragraph 5, he provided that after his death the executors named by him shall be appointed guardians of the property of his minor son and grandson through Court. They shall work under the instructions of the Court and file accounts in the Court regularly, but shall not be competent to alienate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department and re-affirmed by this Court in Nizam-ud-din Amir-ud-din of Lahore, In re. We consider that it is impossible to determine the question raised before us as an abstract question of law governed by the authorities proceeding on their own facts and that it is essential that in such cases attention should primarily be paid to the deed by which the so-called executors are appointed and the limits under which they have to work. Judged in this light, it is obvious that what the testator really intended to mean in appointing the executors of his will was that they had to act as guardians of his minor heirs and in fact enjoined upon them to get themselves appointed through Court and to work under the directions of the Court. He further clarified this position, as stated above, by laying it down in unequivocal terms that after his death the property will vest in his heirs specified by him and not in the executors. This being so, although he used the term ausiya to describe the status conferred on the persons named by him to manager his property, yet it appears in view of all the other provisions made by him in the will that this term was being loosely used by him. The real owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing further was done by the executors and no new loans were advanced. In these circumstances, we do not consider that it can be reasonably argued that in merely collecting the outstanding dues, any business on money-lending was being carried on by the executors. To all intents and purposes, therefore, the so-called executors were mere managers of the property on behalf of the real beneficiaries who owned it and could not, therefore be treated as an association of individuals for the purposes of Income Tax. Counsel for the executors further contends that even if the status of the persons named in the will was that of executors in the first instance, their function as such came to an end as soon as the estate was cleared and they were subsequently relegated to the position of trustees and on that account too under Section 40 of the Indian Income Tax Act, not they but the beneficiaries could be charged with tax. It is obvious that so far as the house property was concerned, the executors had to do nothing more than to collect rents and in respect of the money-lending business and shares in various companies, merely the dues outstanding or accruing were to be realized and all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lordships of the Privy Council there. In that case the assessee had succeeded to the family ancestral estate on the death of his father and his stepmother had obtained a decree for maintenance against him directing the payment to her of a monthly allowance of ₹ 1,100. A question arose whether the sum so paid by the assessee to his stepmother could be included in his income for the purpose of assessing the Income Tax. The Calcutta High Court decided against the assessee on the ground that the case was not covered by permissible exemptions. This decision was, however, reversed by their Lordships of the Privy Council, who in the course of their judgment remarked : When the Act by Section 3 subjects to charge all income of an individual, it is what reaches the individual as income which it is intended to charge. In the present case the decree of the Court by charging the appellants whole resources with a specific payment to his stepmother has to that extent diverted his income from him and has directed it to his stepmother; to that extent what he receives for her is not his income. It is not a case of the application by the appellant of part of his income in a particular wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
