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In Commissioner of Income-tax v. Kikabhai Premchand [[1948] 16 I.T.R. 207.], the question which engaged the attention of the court was whether it was necessary for the assessee to have an actual interest in the income or assets transferred to be within the mischief of the section. Here the assessee had settled a sum of rupees one lakh upon a trust for the purpose of establishing and equipping a sanatorium for the benefit of deserving and needy persons, with himself as the sole managing trustee for life although there were to be other trustees. By various clauses in the trust deed he had the right to retain the trust securities in his name, to operate the banking account of the trust fund without even the other trustees having a right to examine the same and to be entitled to sell the trust properties and become their purchaser. The trust was, however, declared to be irrevocable for a period of six years and three months and to become revocable thereafter with the consent of the trustees. With regard to the settlors power to purchase the trust property, the learned judges held that although it was forbidden by section 53 of the Trusts Act one could not overlook the fact that the settlor had taken to himself such a power in derogation of the law. Again, with regard to the power of the settlor to give loans of moneys to himself it was observed that it would be competent to the settlor to make such a loan without any security but even without interest. The contention of the assessee that for the settlement to be revocable his interest whether direct or indirect had to be an actual interest was repelled by the learned judges. Chagla C.J. observed : "The whole object of the third proviso is to consider a revocable trust irrevocable provided that the settlor enjoys no benefit whatever in the income of the trust for a period exceeding six years.... If.... he does retain any benefit in the enjoyment of the income, then even during these six years the trust does not become irrevocable and the third proviso does not apply...... The proper construction of the trust deed cannot depend upon what the settlor actually does or what he refrains from doing. It can only depend upon the court coming to the conclusion that as the trust deed stands he is entitled to certain benefits whether they are direct or indirect in nature..." In the result it was held that the income of the trust was subject of tax in the hands of the settlor.