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TMI Blog1965 (11) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... as a managing trustee. The trustees had to administer the estate and realise the income and make disbursements in the manner prescribed in the trust deed. For the assessment years 1954-55 and 1955-56, the managing trustee was assessed to agricultural income-tax on the total income from the trust properties under section 12 of the Act. The assessee, inter alia, contended that the assessment should have been made under section 13 of the Act and not under section 12 thereof. The Income-tax Officer and, on revision, the Commissioner of Taxes, Assam, rejected his contention. At the instance of the assessee, the Member, Board of Agricultural Income-tax, Assam, referred the following question to the High Court of Assam for its decision : " Wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltural income derived from such land and received or receivable by him shall be assessed on such common manager, receiver, administrator or the like and he shall be deemed to be the assessee in respect of the agricultural income-tax so payable by each such person and shall be liable to pay the same." Section 13 is subject to section 12. If section 13 applies to an assesse, section 12(1) is necessarily excluded. If the assessment was made under section 12 of the Act, the assessee would be assessed on the total agricultural income derived from such land at the rate which would be applicable if such person had held the land exclusively for his own benefit; and if it was made under section 13 of the Act, the assessee would be liable to pay th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement---managers who do not fall under the above category are outside the section; and (ii) receivers, administrators or the like. Other persons, even though they hold land on behalf of persons jointly interested in such land or the agricultural income derived therefrom, are outside the scope of this section. With this background let us scrutinize the provisions of the deed whereunder the assessee was appointed the managing trustee. Radha Kanta Handique executed the trust deed on January 8, 1941. To that trust deed, his two sons and daughter and another were made parties. They were described as trustees. In the preamble to the deed, he stated his intention that the income of the properties should be enjoyed by certain persons and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into by the managing trustee and how the income was to be distributed among the beneficiaries in proportion to the trust, properties. He gave a direction that the trust properties should be undivided and impartible for all times to come. The document, so far read, leaves no room for doubt that the testator created a trust with the object of preserving the tea estates, vested the property in the trustees and directed only the income therefrom to be paid to the trustees as well as to his servants and to his granddaughters in the manner prescribed thereunder. All the elements of a trust are present in the document. The property, therefore, vested in the trustees. Mr. A. V. Viswanatha Sastri relied upon clauses 17 and 20 of the document in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is undivided share of the trust property to any stranger when another beneficiary agrees to purchase the same for a reasonable price which shall be fixed by the trustees if the vendor and vendee cannot agree as to what should be the reasonable price. But in no case shall a beneficiary have a right to transfer his undivided share in the trust property by way of gift, mortgage or lease except to another beneficiary." Under clause 17, the beneficiaries except Mrs. Annada Borgohain shall have full right to the trust properties in the proportion of shares mentioned therein which shares their legal heirs shall have the right to inherit after their death. This clause, if read literally, appears to be inconsistent with the properties being vested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a trust and, therefore, the properties vested in the trustees for the benefit of the trustees as well as others. On this interpretation of the document, it is manifest that it cannot fall under section 13, for the trustees cannot be described as common managers appointed under any law for the time being in force or under any agreement. They are obviously not receivers, administrators or the like on behalf of persons jointly interested in such land or in the agricultural income derived therefrom. If section 13 does not apply, they directly fall under section 12(1), for they are holding the land partly for themselves and partly for the beneficiaries in terms of that clause. The High Court was, therefore, right in holding that the case fell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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