COMMISSIONER OF INCOME-TAX, PUNJAB, JAMMU &KASHMIR, HIMAC vs RAGHBIR SINGH

The Supreme Court held that under Section 16(1)(c) of the Indian Income-tax Act, 1922, a trust deed directing trustees to first pay the settlor's debts does not constitute a revocable trust. The Court clarified that the income from the trust is not taxable in the hands of the settlor as there is no provision for retransfer of income or assets to the settlor. The High Court's ruling that the income could not be taxed in the hands of the assessee was upheld.