1967 (7) TMI 7

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e agricultural income of the assessee. The relevant facts are these : The appellant, C. T. Senthilnathan Chettiar, hereinafter referred to as the assessee, executed a deed of settlement on November 19, 1959, in favour of Vatsala, who was his concubine. After reciting that the settlor had great love and affection for her, etc., the deed provides : " Now this indenture witnesseth that in consideration of the love and affection which the settlor has for the settlee and the promise which the settlor had made to the settlee the settlor hereby confers in favour of the settlee a life interest only in the properties set out in the schedule hereunder, without any powers of alienation whatever. The settlor puts the settlee in possession of the pro....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of the Act. He refused to exclude the income from the lands settled in the deed from the assessable income of the assessee. The assessee then filed a revision under section 54(1) of the Act to the High Court. The High Court agreeing with the Commissioner held that the settlement was hit by section 9(1) of the Act. The assessee having obtained leave from this court, the appeal is now before us. We may mention that this court at the time of hearing of the application under article 136 gave liberty to the appellant to urge additional grounds, one ground being that section 9(1) of the Act was ultra vires the legislature and also violative of article 14 of the Constitution of India. The relevant provisions of section 9(1) of the Act, w....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the lifetime of the person and from which agricultural income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said agricultural income as and when the power to revoke arises to him. " The learned counsel for the appellant contends that the case was governed by the third proviso to section 9(1) and that till the power of revocation was exercised the income should not be assessed in the hands of the assessee. He further contends that the settlement deed creates two interests, viz., a life interest coupled with and followed up by an absolute interest crea....