TULSIDAS KILACHAND Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to us on this reference is : 'Whether on a true construction of the deed of declaration of trust dated 5th March 1951, the net dividend income of Rs. 30.404 on 120 shares of Kilachand Devchand & Co. Ltd., and 244 shares of Kesar Corporation Ltd. held under trust by the assessee for the benefit of his wife was income liable to be included in the total income of the assessee ?'

(2.) A declaration of trust was made by the assessee on the 5th of March, 1951. It was a short document and the relevant part of it is : '.... I, Tulsidas Kilachand..... hereby declare that I hold 244 shares of Kesar Corporation Ltd., and 120 shares of Kilachand Devchand and Co. Ltd.,.... upon trust to pay the income thereof to my wife Vimla for a period of seven years from the date hereof or her death (whichever event may be earlier) and I hereby declare that this trust shall not be revocable.'

(3.) TURNING to the sections, section 16(1)(c) is in the following terms : 'all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of Indian Income -tax (Amendment) Act, 1939 (VII of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor.'