Law:

Section:

Section 64 of the Income-tax Act, 1961 [Corresponding to section 16(3), of the Indian Income-tax Act, 1922] - Transfer of assets - For benefit of spouse etc. - Assessment years 1958-59 and 1959-60 - During relevant accounting year assessee executed a dead of trust conveying certain properties to his brother, J, who was to hold such properties in trust for benefit of J's wife and daughter - On same day J created a similar trust involving assets and properties of same value as covered by assessee's trust, appointing assessee as trustee for benefits of assessee's wife and son - ITO applied provision of sector 16(3) of 1922 Act and included income from assets given in trust to assessee's brother in assessment of assessee - Whether in view of terms of deed of trust, it could not be said that income that trustee had derived could be included in computing total income of assessee as those terms did not come within scope of section 16(3)(b) of 1922 Act - Held, yes FACTS On 24-4-1957, the respondent executed a deed of trust conveying certain stocks and debentures as well as his interest in landed properties to his brother, J, who was to hold such properties in trust for the benefit of J's wife and 2 daughters, one married and the other a minor. On the same day J, created a similar trust involving assets and properties of the same nature and value as covered by the respondent's trust, appointing the respondent as the trustee for the benefit of the respondent's wife and his major son. For the assessment years 1958-59 and 1959-60, the ITO observed that these mutual transfers were made with a view to avoid the income from the assets and properties concerned being taxed in the hands of the transferors. According to the ITO, the result of these transfers was that neither the respondent nor his brother had lost anything by such transfers and, looked at from the point of view of mutuality of the transactions, the assessee could be treated to have purchased certain assets from his brother for the benefit of his own wife and son and, instead of paying in cash for the properties, he had paid in kind. For these reasons, the ITO applied the provisions of section 16(3) and included…

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