J. K. TRUST, BOMBAY vs THE COMMISSIONER OF INCOME-TAX/EXCESSPROFITS TAX, BOMBAY

The Supreme Court held that a managing agency constitutes property under Section 4(3)(i) of the Indian Income-tax Act, 1922, and thus income derived from it can be exempt from taxation. The Court clarified that while a managing agency carries obligations, it can still be held in trust, and the trustees' use of trust funds in business is equivalent to employing those funds directly. The case was remanded to the High Court to determine if the income qualifies for exemption under Section 4(3)(ia) given the conditions were not met.