HAJI ABDUL HAMEED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE are two connected references under Section 66 of the Indian Income-tax Act, 1922 (hereafter referred to as "the Act"). THESE references raise a common question whether receipts in the hands of beneficiaries are to be treated as earned income or not. Haji Abdul Hameed and Haji Abdul Shakoor are the two assessees. The assessment years are 1957-58 to 1960-61.

(2.) ONE Haji Lal Mohammad executed a deed of wakf in the year 1942. The beneficiaries under the deed of wakf were his two grandsons, Shakoor and Hameed. The property conveyed to the wakf consisted of a business in bidis. In the year 1947, Hameed became the sole rnutawalli. Under the deed of wakf, Hameed and Shakoor were each entitled to one-half share in the income from the business owned by the wakf. For the assessment year 1957-58 the income from the business was fixed at Rs, 2,70,868. The shares, of Hameed and Shakoor from this income came to Rs. 1,35, 434 each. The question arose whether this income in the hands of the two beneficiaries was to be treated as their earned income. On this point, the Income-tax Officer found against the two assessees. It was held that these sums did not represent their earned income. This view was upheld in appeal by the Appellate Assistant Commissioner.

(3.) MR. P. N. Pachauri appearing for the two assessees suggested before us that the receipts in question do not constitute income at all in the hands of the two assessees. I think, it is not open to the two assessees to raise this contention before this court. The case proceeded on the footing that the various sums were assessable as income in the hands of the two assessees. The sole question for consideration by the court is whether certain receipts are earned income or not.