Revocable transfer taxation applies to pre-1939 settlements under the amended income-tax rule.

Income arising from assets settled under revocable instruments executed before 1 April 1939 was treated as taxable in the settlor's hands under the amended Section 16(1)(c) of the Indian Income-tax Act, 1922. The amendment expressly covered income from settlements or dispositions, whether revocable or not, and from revocable transfers of assets, and the text was read according to its plain meaning without implying a temporal limitation for pre-commencement transfers. The assessment was therefore governed by the amended law in force for the relevant year, and the income was rightly assessed on the settlor.

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Issues: Whether income arising from assets settled under revocable instruments executed before 1 April 1939 was taxable in the settlor's hands under the amended Section 16(1)(c) of the Indian Income-tax Act, 1922.

Analysis: The amended clause expressly brought within charge income arising by virtue of a settlement or disposition, whether revocable or not, from assets remaining the property of the settlor, and also income arising by virtue of a revocable transfer of assets. The amendment stated in terms that the former category applied whether the settlement or disposition was effected before or after the commencement of the amending Act. Although the corresponding words were not repeated in the part dealing with revocable transfers of assets, the provision was read as applying according to its plain language and not as implying any exclusion for transfers made before commencement. The assessment was governed by the Finance Act for the relevant year, which operated on income as computed under the Act as amended on the commencement date.

Conclusion: The amended Section 16(1)(c) applied to revocable transfers made before 1 April 1939, and the income was rightly assessed in the hands of the settlor.

Final Conclusion: The appeal failed, and the assessment made on the settlor was upheld.

Ratio Decidendi: Where an amendment to the income-tax law brings income from revocable transfers of assets within the settlor's taxable income in unqualified terms, the court will not read in a temporal limitation that the legislature has not expressed.

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