Narayana Pai, J.

1. In this reference under section 256(1) of the Income-tax Act, 1961, relating to the assessment of the income of C. R. Nagappa of Bangalore for the assessment year 1962-63, the facts which from the basis for the questions referred are briefly the following :

The assessee, C. R. Nagappa, who owned several immovable properties in Banagalore, executed on 14th April, 1955, seven trust deeds for the benefit of his children, one each for the benefit of his six minor sons, and one for the benefit of his one unmarried daughter. Specific immovable properties were transferred upon trust to four trustees, viz., the two wives, one married daughter of the assessee and the assessee himself. Of these, the assessee was to be the managing trustee. Under the terms of the trust deeds, only a portion of the income arising out of the trust property was to be utilised immediately for the benefit of the beneficiaries and the balance accumulated for their benefit to be handed over to them at a future date specified in the deeds.

In connection with Nagappa's assessments for the years 1956-57 to 1958-59, questions arose as to whether and, if so, how much of the income arising out of