| Case ID |
2e0b5c30-75a7-4a06-89a4-52af58b75b2a |
| Body |
View case body. Login to View |
| Case Number |
Case Referred No. 30 of 1959 |
| Decision Date |
Mar 29, 1961 |
| Hearing Date |
|
| Decision |
The court upheld that the tax on the income received by the trustees should be levied at the maximum rate under the first proviso to section 41(1) of the Income-tax Act, 1922. It was determined that the beneficiaries' shares were indeterminate and unknown, thus necessitating the application of this provision. The decision emphasized the mandatory nature of section 41, clarifying that it applies to income received by trustees regardless of whether the beneficiaries are specified or not. The court ultimately ruled in favor of the revenue, confirming the assessment of the trustees' income at the maximum tax rate. |
| Summary |
This case involved the interpretation of the Income-tax Act, specifically section 41 regarding the taxation of income received by trustees on behalf of beneficiaries. The Sahebzadas of Sarf-e-khas Trust was established to provide for the descendants of 'H', with funds allocated for maintenance, scholarships, and charitable purposes. The central issue was whether the income received by the trustees could be taxed under the maximum rate due to the indeterminate nature of the beneficiaries' shares. The court concluded that the provisions of the Income-tax Act were applicable, and the tax should indeed be levied at the maximum rate since the individual shares of beneficiaries were not specified. This case highlights the complexities surrounding trusts and taxation, particularly in cases where beneficiary shares are not clearly defined. Keywords related to trust law, income tax, and beneficiary rights are critical for legal professionals and scholars studying similar cases. |
| Court |
High Court
|
| Entities Involved |
Not available
|
| Judges |
Chandra Reddy, C.J.,
Chandrasekhara Sastry, J.
|
| Lawyers |
K. Rajah Ayyar,
Anwarullah Pasha,
S. Ranganatham,
C. Kondaiah
|
| Petitioners |
Trustees of Sahebzadas of Sarf-e-khas Trust
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1962 SLD 311 = (1962) 44 ITR 332
|
| Other Citations |
CIT v. Balwantrai Jethalal Vaidya [1958] 34 ITR 187 (Bom.),
Habibur Rahman v. CIT [1945] 13 ITR 189 (Pat.),
Mahalaxmiwala v. CIT [1954] 26 ITR 177 (Bom.),
Yakub Versey Laljee v. CIT [1946] 14 ITR 548 (Bom.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
164,
41(1)
|