Broad meaning of "property" under income tax law included business income held under trust for charitable purposes.

The term "property" in section 4(3)(i) of the Indian Income-tax Act, 1922 was interpreted broadly enough to include a business, so income from a managing agency could, in principle, qualify as income from property held under trust for charitable purposes. The Court treated the managing agency as business and held that a trust could subsist over it even though the arrangement involved services, was terminable at notice, and the trust fund operated only as security. The trust deed and agency agreement were read as part of an integrated scheme, supporting the conclusion that the business itself was property held under trust.

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Issues: Whether the managing agency business constituted property so that the income derived from it could fall within section 4(3)(i) of the Indian Income-tax Act, 1922 as income from property held under trust for charitable purposes.

Analysis: The managing agency was held to be business, and business was treated as property of wide import unless the statutory context restricted that meaning. The Court held that section 4(3)(i), standing by itself, was wide enough to include business within "property", and that a trust could exist over such business even though it involved the performance of services and was terminable at notice. The fact that the trust fund was used only as security did not prevent the managing agency from being treated as property held under trust, because the trust deed and the agency agreement formed part of an integrated scheme.

Conclusion: The managing agency business was property, and on the language of section 4(3)(i) it could be regarded as property held under trust; this issue was answered in favour of the assessee.

Ratio Decidendi: The term "property" in section 4(3)(i) of the Indian Income-tax Act, 1922 is wide enough to include business, so income from a business carried on by trustees can, in principle, be treated as income from property held under trust.

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