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1 - 10 of 11 (0.02 seconds)Commissioner Of Income-Tax vs Trustees Of Sir Kikabhai Premchand ... on 6 February, 1967
That decision was followed by a Division Bench of this Court in the case of Commr. of Income-Tax v. Trustees of Sir Kikabhai Premchand Trust and the same is also, therefore, of no assistance for the purpose of deciding the question before me. The last case referred to by the learned counsel on behalf of the plaintiffs was a decision of the Division Bench of this court in the case of Commissioner of Income-tax v. Lady Ratanbhai Mathuradas (1967-68 ITR 504 (Bom)), but in the judgment in that case the application of the doctrine of acceleration appears to have been assumed and it was stated (at p.510) that the sole question was whether the shares of the beneficiaries under the trust deed were indeterminate and unknown, so as to make the trustees assessable at the maximum rate under the proviso to Section 41 of the Indian Income-tax Act, 1922.
Commissioner Of Income-Tax, Bombay ... vs Lady Ratanbai Mathuradas And Ors. on 2 March, 1967
In cases, covered by the Act, therefore, the provisions of the Act alone must be applied, but in any case not covered by the Act, the Court is entitled to apply rules of English law, as laid down by judicial decisions in that country, which are not inconsistent with the Act, as the rules of justice, equity and good conscience . Though Section 9 of the Indian Trusts Act, 1882, provides for a beneficiary renouncing his interest under a private trust by disclaimer, the said Act does not contain any provision relating to the acceleration of subsequent interests on the failure or premature determination of a prior interest. In such a situation Courts of this country must, therefore, resort to the principles of English law on the subject as laid down by judicial decisions in that country. The English doctrine of acceleration of subsequent interests when a prior interest fails or comes to a premature end is not inconsistent with any provision of the Indian Trusts Act, 1882. I accordingly hold that the said doctrine applies in India, both to trusts created by will as well as to settlements inter vivos, provided two conditions are fulfilled, viz., (1) the settlor has not shown a contrary intention in the document creating the trust; and (2) the subsequent interest is vested interest, and not a contingent interest. Turning to the Indenture of Trust dated 18th January 1927 in the present case, it is impossible to find a contrary intention on the part of the settlor so as to negative the applicability of the doctrine of acceleration. In fact, the intention of the settlor, as disclosed by the relevant clause of the Indenture of Trust quoted above is clearly that the heirs of the defendant as on an intestacy should be the only persons who are to be beneficiaries on the failure or determination of the defendant's life interest, whatever be the manner in which the same comes to an end. The words "and he had died intestate in respect thereof" in that clause do not, in my opinion, disclose a contrary intention so as to negative the applicability of the principle of acceleration, but merely describe the class of beneficiaries amongst whom the trust property is to be distributed. There can also be no doubt that the interest which has been conferred on the said class of beneficiaries is a vested interest within the terms of Section 19 of the Transfer of Property Act, 1882, in so far as the condition upon which is certain to occur, and is not in the nature of an uncertain event so as to make it a contingent interest. Moreover, as observed by Vaisey.J, in the case of 1957-3 All ER 52 cited above (at p.54) the application of the doctrine of acceleration may, and does sometimes, alter the constitution of class of beneficiaries from what it would have been if the gift had not been accelerated.
Section 19 in The Transfer Of Property Act, 1882 [Entire Act]
Section 9 in The Indian Trusts Act, 1882 [Entire Act]
Section 58 in The Indian Trusts Act, 1882 [Entire Act]
Section 4 in Income Tax Rules, 1962 [Entire Act]
Section 41 in Income Tax Rules, 1962 [Entire Act]
The Commissioner Of Income-Tax, Bombay vs Smt. Kasturbai Walchand Trust, Bombay on 31 October, 1966
The decision in Kasturbai Walchand Trust's case, is, therefore, not an authority for holding that the doctrine of acceleration applies to deeds of settlement inter vivos.