COMMISSIONER OF INCOME TAX Vs. SUMMERSGILL F LATE

JUDGEMENT

(1.) IN this reference made by the Tribunal to this court under section 66(1) of the Indian Income -tax Act, 1922, the following question has been referred for our determination :

(2.) A few facts giving rise to the question may be stated : The assessees are the executors of the estate of late Shri Frank Summersgill who died in Bombay on 20th March, 1955, leaving his last will made on 23rd February, 1955. The two assessees - Shri Reginald Mathalone and Shri K. B. Parekh - were appointed by the deceased as his executors for the administration of his estate after his death. The question under reference refers to the assessment year 1958 -59. It may be stated that up to the end of the previous year relevant to the assessment year in question the administration of the estate was not completed.

(3.) SHRI Summersgill died on 20th March, 1956, and it appears that a sum of Rs. 41,471 representing the commission of one year's sales after his death was given to the executors as per the aforesaid agreement. It appears that litigation ensued between the legal heirs of Shri Summersgill, namely, his wife and daughter and the executors named under the will in this court on the original side in which the legal heirs claimed for a declaration that the aforesaid amount paid by the company to the executors belonged to them. The originating summons which had been taken in this behalf was decided by this court on 10th February, 1959, and on a true construction of clause 4 of the agreement this court held that the amount of Rs. 41,471 being the commission ascertained by the company in respect of the business booked for the company for one year after the death of Shri Summersgill belonged to his estate and was to be administered by the executors under the directions of the will and the same did not belong to the heirs in their own right.