One Mrs. Bhikhubai Chandulal Jalundhwala, a resident of Bombay, executed a will\u00a0 on 5-1-1962. She died three days after on 8-1-1962. During her life-time 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\u00a0 will\u00a0 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 the other estate.<\/p>\n
On 19-6-1963, an application was filed by the executors and trustees under section 18 of the Bombay Public Trust Act, 1950, for registration of the\u00a0 public trust created under the will. The application was filed under protest. It was contended that it was\u00a0 not\u00a0 a\u00a0 case of\u00a0 creation of\u00a0 a\u00a0 trust under the\u00a0 will but\u00a0 was\u00a0 a\u00a0 case of assignment of power to deal with estate in the manner indicated\u00a0\u00a0\u00a0\u00a0\u00a0 in the will. However, it was held that the trust properties vested in the two executors and trustees as trustees under the terms of the will as well as under section 211(1) of the Indian Succession Act, 1925. It was also held that the trust was a public trust. The trust wasregistered on 29-12-1964.<\/p>\n
Executors and trustees filed income-tax return for the assessment year 1964-65\u00a0\u00a0 and Return was signed as executors of the will.<\/p>\n
\u00a0<\/p>\n
Before the ITO, it was contended that the income-tax return was\u00a0 assessable in\u00a0 the hands of the executors and trustees as trustees and not as executors and\u00a0\u00a0 that since the properties left behind by the testator were held under trust for wholly charitable and religious purposes, its income was exempt from tax under section 11(1) of the Act. Various other contentions were raised but all these were rejected by the ITO who assessed the income in the hands of the executors and trustees as executors.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Examining the will read\u00a0 with\u00a0 other clauses, it\u00a0 is\u00a0 apparent that\u00a0 the\u00a0 trust was to come into being only after funeral and other expenses were met, legatees paid and properties converted into cash by the executors and trustees. That the administration of the estate would come to an end and all the amount, thus, lying with the executors and trustees would form the corpus of the trust. Functions of\u00a0 the trustees and executors as imposed upon them did not come to an end till February 1964.<\/p>\n
\u00a0<\/p>\n
It cannot be said that there was any trust created under the will till February\u00a0 1964. Section 168(3) of the Act makes it clear that executor will continue to be assessed until the estate is distributed among the beneficiaries according to their several interests. (AY. 1964-65) (CA No. 5649 of 1990 dt. 27-8-1999)<\/p>\n
Editorial: CIT v. K. R. Patel [1985] 151 ITR 250 (Bom) (HC) <\/em><\/strong>is affirmed. The contents of the will are very important to decide whether the executors are to be assessed as executors per se<\/em>, or representative assessee or Trustees.<\/p>\n \u201cPrayer is the key of the morning and the bolt of the evening.\u201d<\/em><\/p>\n – Mahatma Gandhi<\/p>\n","protected":false},"excerpt":{"rendered":" S. 168: Executors – Taxability of estate in the hands of executor \u2013Representative assessee- Existence of Trust \u2013 Prior to trust \u2013 taxable as executor \u2013 not as trustee. [ 160 ]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-13435","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3uH","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13435","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=13435"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13435\/revisions"}],"predecessor-version":[{"id":13436,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13435\/revisions\/13436"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=13435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=13435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=13435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}