Law:

Section:

Section 64 of the Income-tax Act, 1961, (corresponding to section 16(3)(a)(iii) of Indian Income-tax Act, 1922) - Transfer of assets - For benefit of spouse etc. - Assessment years 1958-59 and 1959-60 - Assessee executed a trust deed, conveying certain properties to his brother 'J', who was directed to hold same in trust for benefit of his wife and two daughters - On same day, assessee's brother executed a similar trust, in respect of assets and properties of same nature and value as conveyed in trust by assessee - In said trust, assessee was appointed as trustee and benefit thereunder was conferred on assessee's wife and son - Income-tax Officer in computing assessee's income, included income arising from assets transferred to brother as aforesaid - Tribunal, upheld Income-tax Officer's order - Whether income sought to be assessed in assessee's hands arose directly or indirectly to assessee's wife, from assets transferred indirectly through means of a trust - Held, yes - Whether, therefore, entire income from assets transferred by assessee to his brother, was rightly included in assessee's income under section 64(iii) - Held, yes Words and phrases - Words "directly and indirectly" as occurring in section 64 of the 1961 Act FACTS The assessee had executed a deed of trust conveying certain stocks and debentures as well as interest in some landed property to his brother 'J', who was directed to hold the same in trust for the benefit of his wife and two daughters. On the same day, 'J', executed a similar trust in respect of assets and properties of the same nature and value as conveyed in trust by the assessee and in that trust the assessee was appointed as the trustee and the benefit, thereunder was conferred on the assessee's wife and his major son. The Income-tax Officer in computing the income of the assessee included the income arising from the assets transferred to the brother as aforesaid, under section 162(3)(b) of the 1922, Act, on the ground that the respective transfers by the assessee to his brother were made with a view to avoid the income from the assets and properties being taxed in the hands of the transferor. The AAC confirmed the assessment. On…

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