Kapur, J. - (1.) This is a case stated by the Income-tax Appellate Tribunal of Delhi in which the following question has been referred for the opinion of this Court: "Whether the sum of Rs. 32,500/- received by the assessee in the circumstances set out in the Trust-deed later executed by him on (6-81945) was his professional income taxable in his hands, or was it money received by him on behalf of a trust and not in his capacity as an individual?"
(2.) The assessee in this case is Pandit Thakar Das Bhargava, an advocate of Hissar, and the amount in dispute in the present case is a sum of Rs. 32,500/- which was paid in the accounting year ending 31-3-1946. Pandit Bhargava was an advocate of some eminence on the criminal side, but had almost given up his practice. There was a Hindu-Muslim riot case in Farrukhnagar where several persons were killed and some Hindus of Farukhnagar were prosecuted for murder. Some leading Hindus of the Gurgaon district "approached" Pandit Bhargava to conduct the case but he refused as he was not in active practice. Ultimately he was persuaded to accept the brief to defend the accused in the Farrukhnagar case in the Sessions Court "on condition that the accused and their friends provided Rs. 40,000/- for a charitable trust which he would create. He did defend the accused who paid a sum of Rs. 32,500/-" in July 1945. On 6-8-1945 he executed the following deed of trust: "I, Pandit Thakar Das Bhargava, Advocate,..... do hereby declare as follows: I, the executant, have decreased my legal practice for the last few years and I reserved my professional income as an Advocate accruing after June, 1944, for payments of taxes and charity. Accordingly, I have been acting on that. In the Farrukhnagar District Gurgaon case Crown v. Chuttan Lal etc., the relatives and the accused expressed a strong desire to get the case conducted by me during its trial. At last on their persistence and promise that they would provide me with Rs. 40,000/-for charitable purposes and I would create a public charitable trust thereof I agreed to conduct the case. The case is now over. The accused and their relatives have given me Rs. 32,500/- for charity and creating a Trust. The said amount has been deposited in the Bank. If they pay any other amount, that will also be included in that. Accordingly I create this Trust with the following conditions and with the said amount and any other amount which may be realized afterwards or included in the Trust....."
(3.) In their order passed on appeal the Income-tax Appellate Tribunal held- "The income in this case did not at any, stage arise to the assessee. Keeping in mind the express stipulation made by the assessee when he accepted the brief, there was a voluntary trust created, which had to be and was subsequently reduced into writing after the money was subscribed. The payments received from the accused and other persons were received on behalf of the trust and not by the assessee in his capacity as an individual. In this view, we delete the sum of Rs. 32,500/- from the assessment.";