NIRMALA BALA SARKAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a reference under Section 66(1) of the Indian Income-tax Act. The reference is at the instance of the assessee. The assessment relates to the assessment years 1950-51, 1951-52, 1952-53, 1954-55 and 1955-56 respectively. The assessee is an association of persons being the trustees of a trust known as " general trust ". A deed of trust was executed by Hirendra Lal Sarkar wherein the assessee was appointed the trustees. The settlor created certain other trusts on July 17, 1941, in favour if his four daughters. The trust deed in question is at page 20 of the paper-book.

(2.) It is not necessary to reiterate all the terms of the said deed. It is sufficient if we refer to the following facts : The settlor transferred about eight bighas of land to the trustees by the said deed of trust dated December 9, 1944. The trustees were directed to sell the aforesaid land, either in one plot or in different plots. The trust fund was directed to constitute of all the rents and profits of the said land and sale price thereof. By term No. 3 the trustees were directed to spend a sum not exceeding Rs. 10,000 only for the marriage expense of Kumari Dipali. The trustees were also directed to set apart a sum of Rs. 15,000 for the construction of a building on the land settled for her benefit by the deed dated July 17, 1941. By term No. 4 the trustees were directed to construct a building on a part of the plot of land settled for the benefit of Kumari Sefali at a cost of about Rs. 20,000, and by term No. 5, the trustees were further directed to spend a sum not exceeding Rs. 10,000 for the marriage expense of Sefali. By term No. 6 the trustees were directed to spend a similar amount of Rs. 10,000 for marrige and Rs. 20,000 for construction of house for Kumari Juthika. By term No. 7 the trustees were directed to provide for the marriage expense and maintenance of Kumari Asoka. By term No. 8 it was directed if the total sale proceeds exceeded or fell below the sum of Rs. 80,000, the trustees would reduce or enhance the amounts for marriage or for construction of house as the case may be. By term No. 8, the fund in the hands of trustees were directed to be invested.

(3.) Terms Nos. 10 and 11 are material and we refer to these terms which are as follows : Term No. 10 :