CHATURBHUJ VALLABHDAS Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) This is a reference under Section 66(7) of the Indian Income-tax Act, 1922, by the Tribunal of Income-tax, inviting the Court s opinion on the following question:-

(2.) The material facts are few. Gordhandas Khetsey made his will dated April 30, 1934, and died on February 27, 1935. He left a large estate. Clause 15 of the will runs as follows:

(3.) In the statement of case it is stated that the residuary estate consists of immoveable properties in Bombay and its suburbs and also securities. The taxing authorities sought to tax the whole income of the residue on the ground that it did not fall under Section 4(3) ( ) of the Indian Income-tax Act. Before the Assistant Commissioner it was in fact found that a certain amount was spent for religious and charitable purposes and he permitted the amount to be exempted from tax. Except for that, he directed that the balance should be taxed at the maximum rate. The assessee appealed. The Commissioner did not appeal against the order of the Assistant Commissioner. Before the Tribunal it was argued that the word, " charity " used in Clause 15 of the will was not covered by the definition of " charitable purpose " found at the end of Section 4 of the Act. That definition runs as follows: