COMMISSIONER OF INCOME TAX BOMBAY Vs. RATILAL NATHALAL

JUDGEMENT

(1.) This is an appeal under section 66A of the Indian Income-tax Act from the judgment of the High Court of Bombay given on a reference to it by the Income-tax Applies Tribunal under section 66 of the Act.

(2.) The proceedings relate to the four assessment year, 1942-43, 1943-44, 1944-45, and 1945-46,and arise under the following circumstances: There was a Hindu undivided family consisting of one (1) Ramjibhai (2) his son, Ratilal Nathalal-the respondent before us, (3) Ramjibhai's wife, Kamlawanti, (4) Ratilal's wife, Kantabai and (5) Ramjibhai's unmarried daughter, Pushpa, on the 27th July, 1933, Ramjibhai and Ratilal, who were the sole coparceners, at the time, of the said Hindu undivided family, executed a trust deed is respect of four items of house property belonging to the joint family, which owned at the time and constituted to own other properties also. The effect of the trust deed was that the income of the property settled on trust was to be enjoyed by Ramjibhai during his lifetime, and that after his death, the said income was to be enjoyed by the respondent, Ratilal, alone with a right of residence provided in favour of his mother, Kamlawanti in part of one of the houses comprised in the trust deed. After the death of the respondent Ratilal, the income is to be enjoyed by his wife, Kantabai, and the natural born sons in existence at the time of the death of the survivor of Ramjibhai and Ratilal. There was an express power of revocation of the trust deed reserved to the said Ramjibhai by a specific clause therein. Ramjibhai enjoyed the income during his lifetime but the said income was being assessed as joint family income under section 16(1) (c) of Act and as an addition to the other admitted joint family income.

(3.) Section 16 of the Indian Income-tax act was modified in 1939 and clause (c) of sub-section (1) thereof as amended is as follows: