Taxation lawIncome taxBombay High Court

Commissioner of Income Tax, Bombay City v Bai Navajbai N Gamadia

[1948] 16 ITR 109 (Bom); AIR 1948 Bom 41219481 min read
The case in brief30-second read
Facts
In December 1940 the assessee, Bai Navajbai, a Parsi, made an oral trust of securities with a face value of Rs 5 lakh to pay the income to a Parsi Hunnarshala; a trust deed followed on 25 August 1943.
Held
Income from securities held on a revocable trust wholly for charitable purposes was exempt from income tax.
Principle
Income from securities held on a revocable trust wholly for charitable purposes was exempt; 'received' in the exemption includes income deemed received under the Act.
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Facts

  • In December 1940 the assessee, Bai Navajbai, a Parsi, made an oral trust of securities with a face value of Rs 5 lakh to pay the income to a Parsi Hunnarshala; a trust deed followed on 25 August 1943
  • The trust was revocable by the settlor (clause 10 of the deed), and the oral trust was accepted to be revocable too
  • The Department argued that under S.16(1)(c) of the Income-tax Act, 1922 the income was deemed to be hers, and that the exemption for charitable trust income in S.4(3)(i) covered only income actually received
  • The Tribunal held the income exempt, and the question was referred to the Bombay High Court (Chagla C.J.)

Held

  • Income from securities held on a revocable trust wholly for charitable purposes was exempt from income tax.
  • The word "received" in the exemption covers income deemed to be received under the Act.

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Citation

Commissioner of Income Tax, Bombay City v Bai Navajbai N Gamadia [1948] 16 ITR 109 (Bom); AIR 1948 Bom 412

Reported: https://indiankanoon.org/doc/61117/. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.