D. P. Wadhwa, J. - (1.) A Division Bench of the High Court of Judicature at Bombay on a reference under Section 256(1) of the Income-tax Act, 1961 (for short the 'Act') decided all the three questions of law referred to it for its opinion by the Income-tax Appellate Tribunal ('Appellate Tribunal' for short) in favour of the revenue. The assessee is aggrieved. The questions of law are:-"1. Whether, on the facts and in the circumstances of the case, K. R. Patel and B. G. Amin held the properties as trustees from the time of the death of Bhikhubai Chandulal, or whether they held the estate in that capacity from April 5, 1963, when probate of the will was obtained 2. Whether, on the facts and in the circumstances of the case, K. R. Patel and B. G. Amin received income of certain part of the estate as executors and income of the remaining part of the estate as trustees 3. Whether, on the facts and in the circumstances of the case, K. R. Patel and B. G. Amin were liable to be assessed as trustees under Section 161 of the Income-tax Act, 1961 -
(2.) These questions arose from the order of the Appellate Tribunal in the following circumstances.
(3.) One Mrs. Bhikhubai Chandulal Jalundhawala, a resident of Bombay, executed a Will on January 5, 1962. She died three days after on January 8, 1962. During her lifetime she was possessed of considerable properties both movable and immovable. K. R. Patel, the appellant and B. G. Amin, Solicitor, since dead, were appointed as executors and trustees under the Will. The executors and trustees under the Will were directed first to pay all the debts, funeral, death and other testamentary expenses, estate duty. Government dues as soon as possible. Two immovable properties under the Will were bequeathed to two different individuals. It was provided in the Will that the executors and trustees should convey these immovable properties after obtaining probate of the Will and until this was done to deal with the rents and income arising therefrom in the same manner as of other estate. The Will also recited that the testator had during her lifetime gifted her one immovable property to K. R. Patel and under the Will she provided for payment to him Rs. 40,000/- for him to construct a floor on the said property. Testator also devised payment to each of her employees amounting to their respective six months salary.;