Trust business income qualifies for exemption where business itself is trust property, and proviso (b) does not apply.

Business held under trust was treated as property for exemption under section 4(3)(i) of the Indian Income-tax Act, 1922, so income derived from such business qualified for charitable trust exemption. Proviso (b) was held to apply only to business carried on on behalf of a religious or charitable institution, not to business comprised in trust property, and therefore did not defeat the exemption. The record also did not show that the hessian transaction was mere speculation outside the trust's business income, so the income of Rs. 5,31,584 remained exempt.

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Issues: Whether income derived from business assets held under trust was exempt under section 4(3)(i) of the Indian Income-tax Act, 1922, and whether proviso (b) to that provision excluded such income from exemption.

Analysis: The provision exempted income derived from property held under trust for charitable purposes, and business was treated as property for that purpose. The proviso was directed to income from business carried on on behalf of a religious or charitable institution, and not to business itself held under trust. The income in question arose from business of the trust and not from business carried on on behalf of an institution within the proviso. The record also did not establish that the hessian transaction was mere speculation so as to take it outside the trust's business income.

Conclusion: The income of Rs. 5,31,584 was exempt under section 4(3)(i), and the proviso did not disqualify it from exemption.

Ratio Decidendi: Business held under trust is property within section 4(3)(i) of the Indian Income-tax Act, 1922, and proviso (b) applies only to business carried on on behalf of a religious or charitable institution, not to business comprised in trust property.

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