MOTILAL CHHADAMI LAL JAIN vs COMMISSIONER OF INCOME TAX , DELHI ETC.

The Supreme Court held that the entire rental income of Rs.21,000 from the lease of properties is taxable under the Income Tax Act, 1961, despite Rs.10,000 being paid directly to a college by the lessee. The Court clarified that this arrangement does not alter the family's liability to tax, as it is merely a mode of application of income. Additionally, the Court ruled that the income from properties claimed to be transferred to a charitable trust is assessable in the hands of the family, as the trust deed did not effectively transfer the corpus, thus not qualifying for exemption under Section 4(3)(i) of the Income Tax Act, 1922.