DWARKADAS BHIMJI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) . The four assessees purported to settle certain properties on charitable objects by a trust deed dated 10th January, 1936, by a supplementary deed dated 10th March, 1937, and by a third deed dated 12th March, 1936. The trustees are given the power to utilise the net income on all or any of the charities which are enumerated in the trust deed and it is clear that some of the objects on which the trustees can spend the trust income are clearly non-charitable. Some of the objects are merely for the benefit and advancement of the family of the settlers and as it is open to the trustees to apply the whole of the trust income to an non-charitable object, it is clear that the trust is not a good and valid charitable trust. In view of this the Income-tax department sought to assess the income of this trust as the income of the settlers and Sir Jamshedjis contention before us is that although the trust deeds may be bad a charitable trusts, they are valid for other purposes and the income which the trustees received does not become the income of the settlers.