TMI Blog1979 (1) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment is nothing but income? " If the answer to the above question is in the affirmative, then-- " (2) Whether, on the facts and circumstances of the case, inclusion of 15% of the net income from the trust properties as the assessee's income by way of remuneration was justified? " The two questions, as the facts indicate, do not relate to the same assessee, inasmuch as question No. 1 refers to the income arising to the trust and question No. 2 is concerned with the trustee. For the purpose of income-tax each assessee is a unit by itself and consequently the reference of the two questions together creates some confusion. Since, however, all the facts necessary for answering the two questions are stated in the statement of the case, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,91,925. The most important declaration with which these references are concerned, as mentioned in schedule 'A', is to the following effect : " Deduct trustee's remuneration at the rate of 15 p.c. for which trust is declared Rs. 28,788-12-0 " Question No. 1 referred for the opinion of this court is in relation to the income of the trust and question No. 2 is in relation to the remuneration of the trustee at 15% of the net income. For the assessment year 1959-60, the net income of the trust has been held to be Rs. 3,36,942 and the assessee's remuneration at 15% has been worked out to Rs. 50,541. For the assessment year 1960-61, the trust's net income has been worked out to Rs.2,65,813 and the assessee's remuneration has been worked out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee failed in his appeals against the assessments before the AAC. The AAC, while disposing of the assessee's contention, relating to the remuneration issue, observed that there was no statutory bar under the Act to the payment of such remuneration to a trustee. The assessee's further appeal to the Tribunal also failed. The Tribunal, while dealing with the appeals, observed that : " ........ The Bihar Land Reforms Act is no bar for payment of such remuneration. In fact, it provides for payment of remuneration not exceeding 15% of the net income from the trust properties. In the circumstances, the inclusion of 15% of the net income from the trust properties as the appellant's income by way of remuneration from trust is, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " Relying upon this decision, it has been urged that the payment received each year being a compensation for loss of the assets which yield- ed the revenue, the annuity cannot be treated as an income. It is difficult to accept this contention. The decision relied upon by learned counsel for the assessee has no application to the facts of the instant case. Here the trust was receiving income out of certain assets which had been endowed to the deities, for whom the trust had been created. The assets have no doubt vested in the State of Bihar, but the income from the assets has continued to flow for the purposes of the trust. It is not a case in which the capital value of the assets is being paid in annual instalments, rather, it is a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmative, that is to say, that the perpetual annuity received by the trust is nothing but income. Now, so far as question No. 2 is concerned, it relates to the remuneration payable to the assessee as trustee. In regard to this question, learned counsel for the assessee has made two-fold arguments : firstly, it has been submitted that since the assessee's method of accounting for the purpose of this income has been held to be on cash basis, the mere right to receive the income without its actual receipt will not entitle the revenue authorities to bring it to tax. Secondly, the alternative argument is that no income arises to him because (a) he had relinquished his right to receive the same by a deed of relinquishment dated 5th October, 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot sufficient for Pooja Path, Bhog Rag of the Deities and for proper repairs to the Temples. As I am anxious that these Deities and the Temples being the old institutions in the Raj should be properly maintained I desire that the amount of Rs. 28,788-12-0 reserved in the Trust as my remuneration should be distributed proportionately amongst the Deities which are beneficiaries of the Trusts so that their Pooja Path and Bhog Rag may be properly made and the Temples properly maintained which is the sole object of this Trust. " According to learned counsel for the assessee, properly read, these narrations clearly meant that the assessee was relinquishing his right to receive the trustee's remuneration. According to him, therefore, it was a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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