YAKUB VERSEY LALJEE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference, which is made under Section 66(1) of the Income-tax Act, raises a short point involving the construction which is to be put upon a settlement dated 18th September, 1940, and the application to it of Section 41 of the Act. The settlement is a voluntary settlement made by a father for the benefit of his wife, his four sons and three daughters. It is a settlement of real estate with a power to convert it and invest the proceeds of sale. Clause 3, which contains a definition of the trust premises, is in these terms

(2.) IN consideration of the premises the trustees hereby covenant with the settlor that they the trustees shall stand possessed of the said land hereditaments and premises described in the Schedule hereunder written and hereinbefore expressed to be hereby granted conveyed transferred and assure and the net sale proceeds thereof if and when sold and the investments for the time being representing the same (all which said premises the net sale proceeds and the investments are hereinafter for brevitys sake called the trust premises) and the income thereof.....

(3.) WHAT is to be divided is the trust premises and nothing is stated about any distribution or the destination of the accumulations already directed to be made of the surplus income under clause 5. The only other clause which it is necessary to refer is clause 8 :