Chakravartti, C.J. - (1.) The argument addressed to us in this Reference has been lengthy and, if I may say without offence, of a somewhat wandering character, but the point referred is an extremely slender one. It covers but a fraction of the question which will have to be decided in favour of the assessee, if its claim for deduction of certain amounts of money in the computation of its taxable profits is to be allowed.
(2.) The assessee, the Indian Molasses Co. Ltd., is a public limited company. In 1948 its Managing Director was a gentleman of the name of Mr. John Bruce Richard Harvey who had already been in its service for about thirteen years. It has been, found; that there was an agreement that "the Company should provide a pension to Mr. Harvey when he retires." In implementation, apparently, of that agreement, the assessee executed on 16-9-1948. a Deed of Trust by which it appointed three Chartered Accountants as trustees and declared that it had already paid over to the trustees a certain sum of money and undertaken to pay to them certain annual sums for six consecutive years on condition that the trustees would execute a declaration of trust as thereafter specified. The deed went on to repeat that the company was undertaking and binding itself to pay to the trustees a certain sum on 20th September of every year for six consecutive years, the first of such payments to be made on 20-9-1949.
(3.) I may pause here to state that Mr. Harvey was due to retire on 20-9-1955, on reaching the age of fiftyfive years. To revert to the Trust Deed, it proceeded to set out the declaration of trust made by the trustees. Clause 2 of the deed states that trustees hold a sum of 8,208-19-0 which, by the way, was the sum already paid to them and shall hold the rupee equivalent of 326-14-0 which, by the way, was the annual payment which the assessee was undertaking to make upon trust to expend the same and the income thereof, if any, in taking out a Deferred Annuity Policy with the Norwich Union Life Insurance Society in the names of the trustees but on the life of Mr. Harvey. This policy was to cover an annuity of 720 per annum, payable to Mr. Harvey for life from the date when he would attain the age of fiftyfive years.;