| Case ID |
37ff217e-de22-4633-9cab-a39a1ca1d8d4 |
| Body |
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| Case Number |
CIVIL APPEAL No. 1374 OF 1967 |
| Decision Date |
Sep 04, 1968 |
| Hearing Date |
|
| Decision |
The Supreme Court held that the Income-tax Officer (ITO) has the discretion to assess either the representative assessee or the person represented by him, as per the provisions of the Income-tax Act. The Court affirmed that income arising from trust properties settled for the benefit of minor children is liable to be included in the total income of the settlor. The Court ruled that the ITO's assessment of the income used for the immediate benefit of the minors was valid, and the deferred benefits must also be included in the settlor's income for tax purposes. The decision reinforced the principle that income cannot be taxed twice, once in the hands of the settlor and again in the hands of the beneficiaries. The appeal was dismissed in favor of the revenue. |
| Summary |
In the case of C. R. Nagappa v. Commissioner of Income Tax, the Supreme Court of India addressed the complexities of income assessment concerning trusts and minor beneficiaries under the Income-tax Act of 1961. The core issue revolved around whether the income from trust properties settled for the benefit of minor children could be included in the total income of the settlor. The Court concluded that the Income-tax Officer (ITO) has the authority to assess the income derived from such trusts and that both immediate and deferred benefits must be considered in the total income of the settlor. This case underscores the legal framework governing the taxation of income derived from trusts, emphasizing that the provisions of sections 64, 161, and 166 of the Income-tax Act are pivotal in determining tax liabilities. The ruling is significant for legal practitioners and tax advisors dealing with trust and estate planning, as it clarifies the obligations of trustees and the rights of beneficiaries under Indian tax law. Keywords related to this case include 'Income-tax Act', 'trust income', 'tax liability', 'minor beneficiaries', 'settlor income', and 'tax assessment'. These terms are essential for SEO optimization and can help in ranking for queries related to income tax law and trust management. |
| Court |
Supreme Court of India
|
| Entities Involved |
Not available
|
| Judges |
J. C. SHAH,
V. RAMASWAMI,
A. N. GROVER
|
| Lawyers |
K. Srinivasan,
R. Gopalakrishnan,
T. A. Ramachandran,
R. N. Sachthey,
B. D. Sharma
|
| Petitioners |
C. R. Nagappa
|
| Respondents |
Commissioner of Income tax
|
| Citations |
1969 SLD 453,
(1969) 73 ITR 626
|
| Other Citations |
C.R. Nagappa v. CIT [1968] 67 ITR 740,
CIT v. Gurunath V. Dhakappa [1969] 72 ITR 192 (SC),
M.D. Dhanwatey v. CIT [1968] 68 ITR 385 (SC),
V.D. Dhanwatey v. CIT [1968] 68 ITR 365 (SC),
Gurunath V. Dhakappa v. CIT [1964] 53 ITR 757 (Mysore),
P.N. Krishna Iyer v. CIT [1969] 73 ITR 539 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
64,
161,
166
|