Revocable transfer income deemed taxable in transferor's hands under the law in force on the assessment date.

Income arising from assets settled under a revocable transfer was treated as the transferor's income once the amending provision became operative. The court noted that section 16(1)(c) deems income from a revocable transfer to belong to the transferor, and that assessment must be made under the law in force on the date of assessment rather than the law applicable when the income was earned. The absence of express words in the latter part of the clause did not limit its application. On that basis, the income was taxable in the assessee's hands.

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Issues: Whether income arising during the assessment year from assets settled under a revocable transfer executed before the amending Act could be treated as the transferor's income under section 16(1)(c).

Analysis: Section 16(1)(c) provided that income arising by virtue of a revocable transfer of assets is deemed to be the income of the transferor. The deeds in question were revocable, and once the amendment came into force the income received by the beneficiaries from the settled properties fell within the statutory deeming provision. The relevant assessment depended on the law in force at the time of assessment, not on the law as it stood when the income was earned during the previous year. The absence of express words in the latter part of the clause did not prevent its application to income assessed after the amendment had commenced.

Conclusion: The income was rightly deemed to be the assessee's income and was taxable in his hands. The reference was answered in favour of the Revenue.

Ratio Decidendi: For income-tax assessment, the law in force on the date of assessment governs the charge, and income arising from a revocable transfer is deemed to be the transferor's income once the statutory amendment is operative.

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