Law: Income Tax Act, 1922

Section: 4(3)(i)

Section 11 of the Income-tax Act, 1961 [Corresponding to section 4(3)(i) of the Indian Income-tax Act, 1922] - Charitable or religious trust - Exemption of income from property held under - Assessment years 1947-48 to 1956-57 - Testator provided in his will that executors would set apart specified sum out of his estate for purpose of charities which they did - Assessing authorities held that interest earned on said sum, being over and above sum specified in will must go back to estate of deceased testator as he had only authorised expenditure of only specified sum on charities - Whether since testator had given specific direction to executors to take out of his estate specified sum and set it apart for charities, and there was no provision prohibiting executors from spending anything more than said sum on charities, interest earned on said sum was accretion to that fund and, therefore, same was not assessable in hands of executors as income of estate of testator - Held, yes FACTS One 'B' the testator, with a view of obtaining spiritual benefit to his late wife, his late sons and himself, made certain disposition by his will, according to which one lakh of rupees each for his deceased wife and two deceased sons were to be set apart for being spent towards charitable objects, and, another two lakhs of rupees for the ultimate good of himself. In short the testator directed that charities to the extent of five lakhs of rupees be effected. The executors appointed by the testator by the will were his two sons one of whom died soon after the death of the testator, leaving the assessee 'R' as the sole surviving executor of the will. The executor accordingly debited Rs. 5 lakh to the personal account of the testator and credited Rs. one lakh each to the charity accounts of his wife and his two deceased son, and Rs. 2 lakhs to the charity account of the deceased 'B'. At the commencement of Samvat year 1998, i.e., at the close of Diwali of the year 1940, the said B's charity account showed a credit balance of Rs. 2,18,395 out of which a sum of Rs. 35,477 was paid to deceased son's charity account and Rs. 1,20,373 to Ayurvedic College and Hospital account. On the same day,…

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