Law: Income Tax Act, 1961

Section: 28(i)

Law: Income Tax Act, 1922

Section: 10(i)

Section 28(i) of the Income-tax Act, 1961 [Corresponding to section 10(i) of Indian Income-tax Act, 1922] - Business income - Chargeable as - Assessee advocate received certain amount for defending a case of accused - He created a charitable trust out of money received by him - It was seen from records that there was no legal obligation on assessee to create trust from aforesaid amount rather it was assessee's own voluntary desire that he would create trust out of fees received by him for defending accused persons - Whether, in aforesaid circumstances, it could be concluded that amount was received by assessee from accused as his professional income and he was clearly liable to pay tax thereon - Held, yes FACTS The assessee was an advocate. In the relevant assessment year his total income stated to have included certain amount received for defending the accused persons in a case. The assessee claimed that the said amount was not a part of his professional income, because the amount was given to him in trust for charity. This claim of the assessee was not accepted by the Income-tax Officer, nor by the Appellate Assistant Commissioner. Both these officers held that the assessee had received the amount as his professional income and the trust which the assessee later created by a deed of trust, did not change the nature or character of the receipt as professional income of the assessee. On appeal to Tribunal it was held that there was a voluntary trust created, which had to be and was subsequently reduced into writing after the money was subscribed. The payments received from the accused and other persons were received on behalf of the trust and not by the assessee in his capacity as an individual. The High Court also upheld the orders of the Tribunal. On appeal to the Supreme Court : HELD From the facts found by the Tribunal the proper legal inference was that the sum paid to the assessee was his professional income at the time when it was paid and no trust or obligation in the nature of a trust was created at that time, and when the assessee created a trust by the trust deed, he applied part of his professional income as trust property. A trust may be created by…

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