Law: Income Tax Act, 1922

Section: S. 41(1)

(On appeal from the judgment and order of the High Court of West Pakistan, Karachi Bench, Karachi, dated the 10th November 1960, in Civil Reference Case No. 191 of 1957).   Income-tax Act (XI of 1922), S. 41(1) proviso-Variation in trust income does not necessarily lead to conclusion that benefi ciaries' shares are indeterminate when according to terms of waqf they had to share equally-Provisions of trust deed to be referred to-Various clauses of deed may be separately considered Doctrine of sever ability applicable-First limb of proviso not confined to single beneficiary only-[B. P. Mahalaxmiwala v. Commissioner of Income-tax Bombay (1954) 26 1 T R 177 ; Sri Jyotishwari Kalimata and others v. Commissioner of Income tax, Bihar and Orissa (1946) 14 I T R 703 ; Commissioner of Income-tax, West Bengal v. Pulin Behari Dey (1951) 20 I T R 314 ; The Official Trustee of West Bengal v. Commissioner of Income-tax (1954) 26 I T R 410 ; Trustees of Sahebzadas of Sarf-e-Khas Trust v. Commissioner of Income-tax (1962) 44 1 T R 332 ; Yaqub Versey Laljee and another v. Commissioner of Income-tax (1946) 14 I T R 548 ; and K. B. M. Habibur Rahman v. Commissioner of Income-tax (1945) 13 I T R 189 ref. D. V. Arur v. Commissioner of Income-tax (1945) 13 I T R 465 considered].  JUDGMENT   S. A. RAHMAN, J.-This is a certificated appeal from an order of the High Court of West Pakistan, Karachi Bench, passed on a reference under section 66 (1) of the Income-tax Act. The question referred was in the following terms :-   "Whether, in the facts and circumstances of the case, the assessable income of the trust property was taxable at the maximum rate as envisaged in the first proviso to section 41(1) of the Income-tax Act."   The learned Judges returned the answer that the assessable income of the trust property under sub-clause (6) of clause 8 of the trust deed dated the 8th of July 1915, was not hit by the second limb of the first proviso to subsection (1) of section 41 of the Income-tax Act. The Department was ordered to pay the costs of the reference. The correctness of this answer is assailed before us on behalf of the Commissioner of…