| Case ID |
385e1b9e-d6ab-43f8-9475-a3cb395a7aad |
| Body |
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| Case Number |
IT REFERENCE No. 15 OF 1977 |
| Decision Date |
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| Hearing Date |
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| Decision |
The Tribunal incorrectly held that the trust created by Mrs. Leela Nath was a revocable trust under section 63 of the Income-tax Act, 1961. The trust deed did not contain provisions that would allow the settlor to reassume control over the income or assets, thus failing to meet the criteria for revocability. The case examined the specific clauses of the trust deed, emphasizing that the settlor's ability to derive benefits from the trust does not equate to retaining power over it. The court concluded that the trust was irrevocable based on the terms outlined in the deed, which granted trustees discretionary powers without reverting them to the settlor. Therefore, the income from the trust cannot be included in the assessee's income. |
| Summary |
This case revolves around a trust created by Mrs. Leela Nath for her minor children. The primary legal question was whether this trust was revocable under the Income-tax Act, 1961, specifically section 63. The trust deed allowed trustees to manage and invest the trust property without restrictions. The income tax assessment included the trust's income in Mrs. Nath's income, arguing that the trust was revocable. However, the court found that the deed did not grant her rights to reassume control over the trust's income or assets. This judgment highlights the importance of trust deed language in determining tax implications and the nature of trust arrangements, reinforcing that benefits derived from a trust do not necessarily indicate revocability. Keywords include 'trust law', 'revocable trust', 'income tax', 'Calcutta High Court', and 'Income-tax Act, 1961'. |
| Court |
Calcutta High Court
|
| Entities Involved |
Not available
|
| Judges |
Sabyasachi Mukharji,
Sudhindra Mohan Guha
|
| Lawyers |
Dr. D. Pal,
Mrs. R. N. Bajoria,
D. Dhar,
A. K. Dey,
Suhash Sen,
M. Bhattacharjee
|
| Petitioners |
Mrs. Leela Nath
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1982 SLD 917,
(1982) 134 ITR 507
|
| Other Citations |
CIT v. Sir S.M. Bose [1952] 21 ITR 135 (Cal.),
CIT v. S. Raghbir Singh [1965] 57 ITR 408 (SC),
CIT v. Jayantilal Amratlal [1968] 67 ITR 1 (SC),
CIT v. Trustees of Sreeram-Surajmull Charity Trust [1971] 79 ITR 649 (Cal.),
CIT v. Sri Brojendra Nath Kundu [1977] 110 ITR 326 (Cal.),
CIT v. Shyamlal Bhuwalka [1978] 113 ITR 127 (Cal.),
CIT v. Jitendra Nath Mallick [1963] 50 ITR 313 (Cal.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
63,
61,
62
|