Law:

Section:

Section 160 of the Income-tax Act, 1961 [corresponding to section 41(1) of the Indian Income-tax Act, 1922] - Trust/Trustees - Assessment of - Whether where a Hindu executed a deed by which he dedicated certain properties to two deities without specifying their shares, it could be presumed that under said endowment intention of Hindu was to create equal interest in favour of two duties, i.e. both deities took equally and their share thus, being defined, there was no scope for assessment at maximum rate - Held, yes FACTS On 3-6-1917, one G, executed a deed (arpan - nama) by which he dedicated to the two deities certain properties as mentioned in the schedule. He, however, did not specify the shares which each of the deities was to get in these properties. The revenue authorities opined that the share of each of duties being indeterminate, the income receivable by each of the deities would be indeterminate and thus, under the proviso to section 41 tax was leviable and recoverable at the maximum rate at the relevant date. On appeal, the Tribunal held that under the endowment the two deities took equally and that there was no scope for the assessment at the maximum rate. On reference : HELD The fact that the share for each deity were not mentioned gave no reason to think that the executant had left it to Sebait to distribute the amount in the way he pleased. It seemed much more reasonable to think that the devotion of the executant of the Arpan-nama was the same for both the deities installed by him and that his intention was that the Sebait would spend equal sums for the festivals for these two deities. The scale of expenditure as mentioned in the schedule was, therefore, of no assistance to rebut the presumption that the .intention was to create a tenancy in common. The presumption being that the intention of a Hindu was to create equal interest in favour of the two deities, to whom the dedication was made, it would be proper to interpret the provision of the relevant clause of the arpan-nama to mean that if there be any surplus of the income of the debutter properties in the share of either deity, than the Sebait shall be entitled to increase in his discretion…

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