Law: Income Tax Act, 1922

Section: 40,16(1)(c),41

Law: Income Tax Act, 1922

Section: 40,16(1)(c),41

Income-tax Act, 1922 -- Section 41 -- Income -- Application of income -- Assessee appointed mutwalli of certain properties under an Award -- Assessee apportioning income of properties between himself and his son under a deed of declaration -- Whether a valid or legal assignment attracting exemption from tax under the law -- Held no -- Whether total income from properties assessable in the hands of the assessee -- Held yes -- Whether a case of application of income -- Held yes - Assessee managing a definite portion of property as Mutwalli under an arrangement inter se Mutwallis of Waqf alal aulad--Entire in come from such property accruing to assessee who could spend same for his well-being and for his line of family members -- Assessee divesting himself of share of income to give same to his son -- Such application of portion of income not valid of legal assignment attracting exemption under law -- Assessee, held liable to taxed for entire income -- Assessee, by deed of declaration, apportioning net income of properties in his charge between himself and his son in ratio of 60 and 40 respectively -- Case one of application of income and not of a valid or legal assignment attracting exemption under law -- Assessee, held, liable to be taxed for entire income under Section 41 -- JUDGMENT The judgment of the Court was delivered by GUL MUHAMMAD KHAN, J.---This tax reference has been made by the Income-tax Appellate Tribunal Pakistan, Lahore, at the instance of the assessee. It pertains to the assessment year 1962-63 and arises out of the assessee. It pertains to the assessment year 1962-63 and arises out of the order dated 30th April, 1970 of the Tribunal. It raises the following question of law:- "Whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that the entire income from the properties was assessable in the hands of the applicant?" 2. The petitioner is one of the sons of Khan Bahadur Sheikh Muhammad Naqi who had, vide deeds dated 20th April, 1931 and 16th March, 1943, created a Waqf-Alal-Aulad of his properties mentioned therein in favour of his sons and their descendants. Later on 22nd December, 1950, a…

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