Equal beneficial interests under a Hindu endowment made the maximum-rate proviso inapplicable.

On the terms of the Hindu endowment, the two deities were held to take equal and determinate beneficial interests, because a dedication to both deities together does not by itself create a joint estate or leave income allocation to the sebait's discretion. The expenditure schedule and operative clauses showed no contrary intention, and clause 5(a) was construed only as permitting adjustment of expenses between surplus and deficit for each deity. As the interests were definite and equal, the proviso to section 41 of the Income-tax Act did not apply and assessment at the maximum rate was not attracted.

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Issues: Whether, on the terms of the endowment in favour of two deities, the beneficial interests were equal and determinate so that the proviso to section 41 of the Income-tax Act did not attract assessment at the maximum rate.

Analysis: A Hindu dedication is ordinarily presumed to create separate and equal interests rather than a joint tenancy, unless the instrument clearly indicates a contrary intention. The deed of endowment dedicated the properties to both deities together, but the schedule of expenditure and the operative clauses did not show any intention to confer a joint estate or to leave the allocation of income to the discretion of the sebait. Clause 5a, properly construed, merely permitted adjustment of expenditure for each deity according to surplus or deficit and did not authorise an unequal or indeterminate division of the beneficial interest.

Conclusion: The two deities took equal shares under the endowment, their interests were determinate, and the proviso to section 41 was inapplicable. The answer to the reference was therefore in favour of the assessee.

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