COMMISSIONER OF INCOME-TAX, GUJARAT vs JAYANTILAL AMRATLAL, AHMEDABAD

The Supreme Court held that the provisions of Section 16(1)(c) of the Indian Income-tax Act, 1922, do not apply to the income of a charitable trust created by a settlor, as the settlor's powers under the trust deed must be exercised lawfully and cannot contravene the Bombay Public Trusts Act, 1950. The Court clarified that the mere ability of the settlor to derive some benefit from the trust does not equate to re-assuming control over the trust's income. The High Court's decision favoring the settlor was upheld, affirming that none of the trust deed's clauses fell within the purview of the proviso to Section 16(1)(c).