The main legal point established in the judgment is that specific directions in a will do not necessarily exempt designated expenses from income tax, and the executors are liable for tax on the entire income received.

JUDGMENT

DERBYSHIRE, C.J. - This is a Reference u/s 66 (1) and 66 (2) of the Indian Income Tax Act, XI of 1922, by the commissioner of Income Tax. The matter arises out of an assessment of tax in the year 1933-34 on the income of the accounting year ending 31st March, 1933, of Messrs. P. C. Mullick and D. C. Aich who are the executors of the estate of Akshoy Kumar Ghose and are the assessees here.

The facts are set out in the Reference itself. Akshoy Kumar Ghose died in October 1931. Under his will Akshoy directed in paragraph 1 :-

"After my death if I have any debts my said executors (executors) and trustees shall pay up the same out of the income of my property and on the occasion of my Addya Shradh they shall pay Rs. 10,000, ten thousand Rupees, out of the income of my property for expenses in connection with the Addya Shradh to the person who will be entitled to perform the Sradh".

In paragraph 2 he directed :-

"My said executors and trustees shall pay out of the income of my property, the costs of taking out probate of this last instrument of will and of (administration) of my property".

Question 1 asks :-

"Whether or not in computing the chargeable income the whole of the amount (Rs. 10,000) provided in the will of Akshoy Kumar Ghose as payable out of income on account of his sradh, should have been left out of calculation, and not merely the actual amount paid in the year of assessment on account of the same (Rs. 5,537) ?"

That is a question referred by the Commissioner at the instance of the trustees. The Commissioner himself has referred another question to us u/s 66 (1) and it is this :-

"Whether in computing the income chargeable to tax in this case, the Income Tax Officer should, on a proper application of the law, have excluded no part of the sum of Rs. 10,000 ?"

It is claimed by the excutors that no part of the Rs. 10,000 directed to be paid to the person entitled to perform the sradh is chargeable to income tax. The Commissioner has allowed, that is to say, exempted from taxation a sum of Rs. 5,537 which was the sum actually expended on the Addya Sradh of the deceased. The Addya Sradh ceremony is performed as a rule about one month after the death of the deceased. It is an act of piety and devotion on the part of the person who performs it. It may be, although personally I have some doubt, that expenses of the performance of this Addya Sradh, i.e., the first sradh after the death of the testator, are part of the necessary funeral ceremonies contemplated by Section 316 of the Indian Succession Act. As I have said, I have some doubt whether it is one of the necessary funeral ceremonies, because it takes place some time after. If it is, then according to Section 316 of the Indian Succession Act it is the duty of an executor to provide funds for the performance of the necessary funeral ceremonies of the deceased in a manner suitable to his condition, if he has left property sufficient for the purpose. Section 320 of the Succession Act says :-

"Funeral expenses to a reasonable amount, according to the degree and quality of the deceased, and death bed charges, including fees for medical attendance, and board and lodging for one month previous to his death, shall be paid before all debts".

If the expenses of Addya Sradh are part of the necessary funeral ceremonies of the deceased, then the expenses actually incurred, reasonable, proper and suitable to the condition in life of the deceased, would be payable by the executors, out of the general estate of the deceased. In this case however the deceased has been careful to direct his executors and trustees to pay Rs. 10,000 for the expenses is connection with the Addya Sradh to the person who would be entitled to perform the Sradh out of the income of his property. The testator seems to have been very careful and very anxious that no encroachment should be made on the corpus.

The case of Trustees of The Sir Currimbhoy Ebrahim Baronetcy Trust v. Commissioner of Income Tax, Bombay, is in