A.C.SEN J. - (1.) THIS is a reference under s. 66(2) of the IT Act, 1922, at the instance of the assessee. The question that has been referred to us for our opinion is as follows : "Whether, in the facts and circumstances of the case, and on a proper interpretation of the deed of conveyance and the deed of settlement the Tribunal is right in holding that the house property being premises Nos. 46A and 46B, Wellesley Street, Calcutta, is not trust property ?"
(2.) THE facts may briefly be stated thus : In the course of the assessment proceedings for the asst. yrs. 1958-59 and 1959-60, the assessee claimed before the ITO that the income of the house property consisting of premises Nos. 46A and 46B, Wellesley Street, Calcutta, should be treated as income derived from trust property and hence should be taxed not in his hands as his individual income but as income derived by him as trustee from trust property. It appears that the assessee filed two returns-one in his own name, viz., Shri Durga Prosad More, declaring loss at Rs. 9,736 and the other in the name of Shri Durga Prosad More in the capacity of trustee to the estate of Smt. Benarasi Debi declaring total income at Rs. 34,380. It was stated by the representative of the assessee before the ITO that the said house property should not be taxed in the hands of the assessee as it was a trust property but should be taxed separately. In the deed of sale dt. 30th September, by which the aforesaid premises were purchased, the assessee has been described as a trustee, being a party thereto as of the fourth part. In the recitals we get the following assertions : "Whereas Smt. Benarasi, wife of the said trustee, has set apart and made over certain sums to the trustee to have and to hold the same upon trust for investing the same in immovable properties for the maintenance of herself during her lifetime with the rents, issues and profits thereof after payment of all outgoings and on her death to hold the same in trust for her sons . . . . . . . . for their maintenance during their minority and on their attaining majority upon trust to make over the same to the said sons absolutely in equal shares and whereas as such trustee as aforesaid and with a portion of the money made over to him for the purposes of the aforesaid trust the said trustee became desirous of purchasing the said premises No. 46A, 46B, Wellesley Street, and whereas the vendor has agreed with the trustee for an absolute sale to him of the said land. . . . . . . . for the sum of rupees one lakh and eighty-five thousand free from all encumbrances . . . . Now this indenture witnesseth that, etc. " Therefore, in the deed of conveyance it is clearly stated that the assessee got from Smt. Benarasi a certain sum of money with the direction that the money was to be utilized for purchasing the premises in question and that the said premises were to be held in trust for the benefit of Benarasi and her two sons.
(3.) NEARLY after one year another deed known as the deed of settlement was executed by and between Smt. Benarasi and the assessee. The relevant portion of the recitals in the deed of settlement runs thus : "This indenture between Smt. Benarasi, wife of Durga Prosad More . . . and Durga Prosad More, son of Jagannath More . . . . . . hereafter called the trustee : Whereas the settlor was possessed of and absolutely entitled to a considerable amount of money as her absolute stridhan property . . . . . and whereas the settlor requested the trustee to act as trustee of such trust and the trustee agreed to act as such trustee and whereas the settlor gave the said sum of rupees two lakhs to the trustee absolutely to hold the same upon the trust hereafter mentioned and to invest the same in suitable immovable or other properties . . . . . . and whereas out of such money the trustee has invested a sum of Rs. 1,85,000 (rupees one lakh eighty-five thousand) in the purchase of premises Nos. 46A and 46B, Wellesley Street . . . . . and whereas it is desirable that the terms upon which the trustee is holding the trust properties, the trusts and his duties and powers should be recorded in a document . . . . . It is hereby declared as follows, . . . . ." ;