TMI Blog1975 (4) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... months or within the extended time granted by the Probate Commissioner. The scrutiny of her bank account revealed to the Income Tax Officer that amounts representing income from the estate of her husband, of which she was appointed as sole executrix, were deposited into her personal account during the relevant previous years. From this the Income Tax Officer had drawn the inference that the amounts so deposited in the assessee's personal account during the relevant previous years. Represented the income of the estate which she distributed to herself as the sole legatee. He accordingly included those amounts in the assessee's total income of the relevant previous years under s. 168 (4) of the Income Tax Act, 1961 and completed the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sole residuary legatee and that the conduct of the assessee in depositing into her personal account the amount representing the income from the estate would lead to no other conclusion than that as executrix she distributed that income to herself as the sole residuary legatee and, therefore, the latter half of s. 168 (4) was attracted and the ITO was justified in assessing those amounts in the hands of the assessee as an individual. 4. Sri s. Bhattacharya, learned counsel for the assessee, has contended on the other hand, that the action of the ITO in applying the second half of s. 168 (4) to this case was misconceived. His submission is that the question of exclusion of the income of the estate from the total income of the estate and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the forefront the provisions of s. 168 (4). The said subsection without the Explanation reads as follows:— "(4) In computing the total income of any previous year under this section any income of the estate of that previous year distributed to, or applied to the benefit of, any Specific legatee of the estate during that estate during that previous year shall be excluded; but the income so excluded shall be included in the total income of the previous year of such specific legatee." 6. We have to bear in mind the significance of the expression specific legatee occurring in this section. This section contemplates a situation where the income of the estate is distributed to, or applied for the benefit of, a specific legatee. In other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re significant. They are used in contradistinction from the entirety of the estate. 9. In T.P. Gopalkrishnan's Law of Will (2nd Edn.) at pages 367 and 368 we find the following passage:— "In Bothamley vs. Sherson (1875 20 Hq 304) a specific legacy was thus explained by Jessel R. M.: 'It is in the first place part of the testator's property. In the next place it must be a part emphatically as distinguished from the whole. It must be a severed or distinguished part: it must not be the whole, in the meaning of being the totality of the testator's property or the totality of the general residue of his property after having given legacies out of it." 10. That a residuary legacy is not a specific legacy is explained at page 452 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income thereof. As soon as administration is complete, the executor or personal representative becomes a trustee." 12. It may thus be seen that before the completion of the administration of the estate there might be distribution of income to, or its application for the benefit of, the specific legatees but no residuary legatees. Pending completion of the administration of the estate the executor receives the income in his own right but not on behalf of the residuary legatees. In this connection we may refer to two rulings, one of the Calcutta High Court and the other of the Supreme Court. In Asik Kumar Ghose vs. CIT(1) the Calcutta High Court held as follows: An executor does not, while the administration is still incomplete hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable on income of an estate in the course of administration. As share of residence does not belong to the beneficiary until it is ascertained either in whole or part by transfer or assent to him or by appropriation." 14. In the present case the position of the assessee, according to ITO's finding, is that of a residuary legatee. As already explained by us, a residuary legatee is distinguishable from specific legatee. Pending the completion of the administration of the estate, the executor or executrix realises the income from the estate in his or her own right but not on behalf of the residuary legatees. That being so, there could not be any distribution of income to, or application of income for the benefit of, the residuary legatee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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