Law:

Section:

Section 164 of the Income-tax Act, 1961 [Corresponding to section 41(1) of the Indian Income-tax Act, 1922] - Trust/Trustees - Charge of tax where share of beneficiaries unknown - Assessment years 1952-53 and 1953-54 - 'R' created a trust in respect of houses and godowns - As per deed of endowment trustees were to provide for and defray out of said rents and profits performance of certain religious festivals and ceremonies and poojas of certain deities - ITO taxed income from property in hands of assessees-trustees at maximum marginal rate on ground that income was to be utilised by trustees for performing certain poojas and was not specifically receivable on behalf of any one person - From endowment deed, it appeared that beneficiaries for whom income of endowed properties was received were entitled to definite, determinate figures, but fixed proportion under which income was receivable by trustees had not been mentioned - Settlor had made a provision to create a reserve fund out of surplus accumulated rents and profits of endowed properties - Apart from fact that money to be spent for worship of deities and feeding Brahmins was indetermine and unknown, trustees in their discretion might exhaust entire reserve fund in a particular year for - Whether on facts, it could not be said that respective shares of beneficiaries were determinate and known income from property in hands of assessee was assessable at maximum rate by virtue of first proviso to section 41(1) of 1922 Act - Held, yes Words & Phrases : Word "share" as occurring in section 41(1) of Indian Income-tax Act, 1922. FACTS 'R' executed a will under which he created a trust in respect of several houses and godowns including the tenanted houses. This settlement of trust was made to ensure due performance of certain religious festivals and ceremonies and poojas of certain deities. At the material period the assessees were the trustees to the estate of the late 'R' for each of the assessment years 1952-53 and 1953-54. The assessees were assessed to a total income of Rs. 7,973 being the rental income from the house property and ground rent, etc. The ITO taxed this income at the maximum rate under…

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