Law:

Section:

JUDGMENT Tendolkar, J.-The question referred to us on this reference is: "Whether on a true construction of the deed of declaration of trust dated 5th March, 1951, the net dividend income of Rs. 30,404 on 120 shares of Kilachand Devchand & Co. Ltd., and 244 shares of Kesar Corporation Ltd. held under trust by the assessee for the benefit of his wife was income liable to be included in the total income of the assessee ?" A declaration of trust was made by the assessee on the 5th of March, 1951. It was a short document and the relevant part of it is: "......I, Tulsidas Kilachand.......hereby declare that I hold 244 shares of Kesar Corporation Ltd., and 120 shares of Kilachand Devchand and Co. Ltd.,.............upon trust to pay the income thereof to my wife Vimla for a period of seven years from the date hereof or her death (whichever event may be earlier) and I hereby declare that this trust shall not be revocable." Now, although the question has been raised in a general form, it is clear that the income can be included in the income of the assessee only if it falls under section 16(1)(c) or under section 16(3)(b). The Tribunal took the view that it did not fall within section 16(1)(c), but that it did fall within section 16(3)(b). Turning to the sections, section 16(1)(c) is in the following terms: "all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of Indian Income-tax (Amendment) Act, 1939 (VII of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor." Then, the third proviso to this sub-clause says: "Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the lifetime of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492