Law:

Section:

Section 160 of Income-tax Act, 1961 [Corresponding to section 41 of Indian Income-tax Act, 1922] - Trust/trustees - Assessment of - One 'C' had acquired substantial properties in Malaya - 'C' admitted that his status was that of HUF and he submitted returns in his capacity as karta thereof - He executed a will in respect of his properties in Malaya in accordance with law of that country - Shortly, thereafter, he died leaving behind two sons and a daughter - Sons were appointed as executors and trustees under will, and they were directed to pay their sister namely 'M', certain amount within two years of death of 'C' - Whether, on facts, section 41 of 1922 Act would not apply to assessment, unless it were show that executor had discharged themselves from their position as executors and began functioning as trustees for beneficiaries under settlement - Held, yes - Whether so far as payment made to daughter was concerned, since it was directed to be made out of assets left by deceased, it could not, therefore, be of revenue in nature, and consequently, said amount could not be excluded from assessable income - Held, yes FACTS "C" had acquired substantial properties in Johore Bahru in Malaya. He executed a will in respect of his properties at Johre Bahru, in accordance with the law of that country. Shortly thereafter, the died, leaving behind him his two sons 'V' and 'VN' and a daughter "M". The sons were appointed as the executors and trustees under the will, and they were directed to pay 'M' a sum of Rs. 20,000 within two years of the death of the testator. The executor took charge of the estate. The executors paid "M", the Rs. 20,000 within the period prescribed by the will. The properties in Malaya were acquired in the name of "C". He was originally assessed to tax as an individual. But during the assessment year 1939-40, the assessee admitted that his status was that of a Hindu undivided family, and he submitted returns in his capacity as karta thereof. In response to a notice under section 22(2) of 1922 Act "V" and "VN" submitted a return in their capacity as trustees; they claimed that they should be assessed in their presentative capacity under section 41 of…

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