CHIRANJILAL SHRILAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is the assessees' reference. The assessees are trustees of a trust. The assessment year involved is 1971 72. The Tribunal has referred to this Court the following question of law under s. 256(1) of the IT Act, 1961 (for short, "the Act") :

(2.) ONE Shri Chiranjilal Shrilal Goenka settled some of his properties on trust by an indenture dt. 30th June, 1962. The indenture, inter alia, provided that the trust income shall be accumulated for 18 years. Thereafter, 25 per cent of the trust fund along with its accumulations will be spent on charity as mentioned in cl. 4 of the indenture and the remaining 75 per cent will be handed over to the wife or widow of the settlor's son, Shri Radheshyam Chiranjilal Goenka, who may be then living and if, at the relevant time, there is no such wife or widow of the settlor's said son, then that portion of the fund along with accumulations shall be handed over to the heirs of the settlor, such heirs to be determined as if the settlor had died intestate at the date of distribution.

(3.) THE short question that arises for consideration in this reference is whether the assessees' claim that the remaining 75 per cent of the trust income does not fall under S. 164(1) of the Act is tenable. The relevant provisions of S. 164(1) as they stood in the year under consideration have been reproduced in the Tribunal's order in paragraph 6. For the sake of convenience, the provisions are reproduced hereunder :