TaxTMI 
TaxTMI 
1960 (10) TMI 5
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....cially devoted to the maintenance of the aforesaid institutions as also the declarant may as hitherto treat himself and be treated by others as a legal trustee of the said institutions and the properties out of the income of which the said maintenance is being and will be provided for." Clause 7 : " The declarant declares that henceforth he holds and will hold the properties detailed at the foot thereof in schedule 'A' in trust for religious purposes of maintaining the religious institutions mote fully described in schedule 'B' annexed hereto." Clause 8 : " The declarant further declares that in all lands now held by him in the aforesaid properties as bakast or proprietor's private lands as in the schedule 'C' which are in direct khas c....
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....ome of the trust properties in the year in question not being agricultural income in the appellant's hands was liable to be taxed. In appeal to the Income-tax Appellate Tribunal, Patna Bench, Patna, the order passed by the Appellate Assistant Commissioner in so far as it related to remuneration received by the appellant was affirmed. The High Court of Judicature at Patna thereafter at the instance of the appellant directed the Income-tax Appellate Tribunal to submit a statement of the case on five questions set out in the order. The fifth question (which is the only question, material in, this appeal) was as follows : " Whether, in the facts and the circumstances of the case, the amount of Rs. 21,274 being the amount paid to the assessee ....
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....hich by the covenant contained in the deed of trust he has received is also exempt under section 4(3)(viii) because, when he appropriated a fraction of the rent or revenue of agricultural lands towards his remuneration, the original character of the income was not altered. The appellant has no beneficial interest in the lands which are the subject-matter of the trust : nor is he given under the trust a right to receive and appropriate to himself the income of the properties or a part thereof in lieu of any beneficial interest in that income. The source of the right in which a fraction of the net income of the trust is to be appropriated by the appellant as his remuneration is not in the right to receive rent or revenue of agricultural lan....
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.... used for agricultural purposes. In Premier Construction Co. Ltd. v. Commissioner of Income-tax it was held by the Privy Council that income received by an assessee not itself of a character to fall within the definition of agricultural income does not assume the character of agricultural income by reason of the source from which it is derived, or the method by which it is calculated. But if the income received falls within the definition of agricultural income, it earns exemption, in whatever character the assessee receives it. In that case, the remuneration payable to a managing agent of a cornpany in consideration of services to be rendered was a minimum annual salary of Rs. 10,000 payable irrespective of whether the company made any p....
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....d the income, because of the legal ownership vested in him and even though under the covenant of the mortgage deed, he was required to appropriate the income towards his dues, the income in his hands did not cease to be agricultural income. In Kameshwar Singh's case the court was called upon to consider the nature of the primary receipt by the mortgagee and not of the appropriation made under the covenant of the deed of mortgage. In Syed Mohammad Isa v. Commissioner of Income-tax the assessee was a mutwalli appointed under two deeds. Under both the deeds, he was to receive agricultural and non-agricultural income and to utilise the same for purposes of the trust. Under one of the two deeds of trust, the balance was to be retained by the m....