Law:

Section:

Section 160 of the Income-tax Act, 1961 [Corresponding to section 41 of the Indian Income-tax Act, 1922] - Trust/Trustees - Assessment of - One 'R' executed will by which he appointed his brother as executor - Till and up to assessment year 1954-55, assessments were made on 'M' in his capacity as executor - 'M' had applied for probate of will - He died in 1956 and 'N' was appointed as administrator - Income-tax Officer assessed 'N' under section 23(4) - Case of 'N' was that when proceeding for probate were pending before court, a compromise had been entered into which provided that widow of 'R' would be paid certain amount and that after compromise position of executor was that of trustee and hence legatees were to be assessed under section 41 - Whether if there are specific bequests and if there is an assent by executor which assent may be verbal, express or implied from conduct of executor, that would be enough to divest interest of executor and to transfer subject of bequest to legatee - Held, yes - Whether grant of probate in instant case had to be understood as implementing of desire of parties that were before court and their desire and their intentions and arrangements reached between them which had been incorporated in categorical terms in compromise - Held, yes - Whether, therefore, in circumstances of case, assessment of income of estate of late R in hands of N had to be made under section 41 of Indian Income-tax Act, 1922 - Held, yes FACTS One R who was ordinarily resident in Ceylon and who was doing business in Colombo had executed a will dated 21-6-1945, bequeathing large estates and properties owned by him. M the brother of R, was appointed executor under the will R died on 8-8-1948. Till and up to the assessment year 1954-55, the assessments were made on M in his capacity as the executor of the estate of late R. Though on the basis of a return filed by M for the assessment year 1955-56, an assessment had been made, that assessment was set aside, the matter having been reopened under section 34 of the Indian Income-tax Act, 1922, M in the meantime died and one N another brother of the deceased, was appointed by the court to which M had applied for…

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