1. ' SALEEM AKHTAR,J.--This reference relates to the assessment years 1954-55, 1957-58, 1964-65, 1965-66 and 1966-67. The applicant is assessed as an individual. He has created Hamdard Dawakhana Trust of which he is a Waqf Mutawalli. Originally he was the sole proprietor of the business carried on under the name and style of Hamdard Dawakhana but in the year 1953 a Trust was created in respect of this business. Clause 41 of the Trust Deed provides for the manner in which the profits of the Trust were to be appropriated. According to this clause 1/8th of the profit was to be transferred to reserved fund and Out of the residue of the net profits 3/4th share was to be contributed to Qaumi income (charitable purpose) and the remaining 1/4th to the family income. None of the parties have produced the Trust Deed nor its relevant rules have been quoted in the order of the Tribunal or the statement of the case. We have, therefore, relied upon the statement of case referred by the Tribunal for the purpose of ascertaining the intent and language of clause 41 of the Trust Deed. Hamdard Dawakhana Trust filed its return before the Income Tax Officer claiming exemption in respect of 3/4th of the income reserved for charitable purposes. This plea was not accepted by the Income Tax Officer and the entire income of the Trust was subjected to tax. The Income Tax Officer had rejected the account submitted by the Trust and computed the income by estimating the sale and applying gross profit rate thereto. By such computation the income of the Trust was determined more than actually shown in the return. The Trust filed an appeal before the Tribunal which allowed exemption of 3/4th share of the determined income but the finding of the Income Tax Officer on rejection of the account book was upheld. The Tribunal held that 3/4th income of the Trust was exempted from tax and only 1/4th income of the Trust was taxable in the hands of the applicant. The applicant had claimed that he was liable to tax only in respect of 1/4th of the income credited to him in accordance with the audited account as required by clauses 30 and 41 of the Trust Deed. The Tribunal did not accept this contention and rejected the appeal. On an application under section 66 (1) filed by the assessee the following question has been referred:- "Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the assessee was liable to be assessed on 1/4th of the income determined in the case of Hamdard Dawakhana Trust?
2. ' Before dealing with the contentions of the learned counsel for the applicant, it should be noted that the finding of the Tribunal regarding rejection of the accounts of the Trust has not been challenged. The learned counsel for the applicant has contended that the applicant should be taxed only on that income which he has received or which has been credited in his account according to the audited account. As is obvious from the statement of facts that the applicant is the creator of the Trust. He is the Mutawalli and he has reserved 1/4th income of the Trust for himself or his family. Therefore, the income of the applicant would be 1/4th of the income which has accrued to the Trust. It has not been provided in the Trust that the income of the applicant will be only that income which is audited and declared before the Income Tax Officer. If the account books of the Trust are rejected then the income of the applicant on record is bound to be affected. In present case the accounts have not been accepted and the income of the Trust has been enhanced on well-recognised principles. Therefore, applying the provision of clause 41 which provides for apportionment of the income of the Trust, the applicant would be entitled to 1/4th of the income and in the present case the income determined by the Income Tax Officer is the real income of the Trust. Income of the Trust cannot he bifurcated in two parts i.e, one for the purpose of income tax and the other for determining the income of the applicant. What the applicant will get is 1/4th of what the Trust has earned. , ' In these circumstances we do not find that the Tribunal has erred in coming to the conclusion that the applicant is liable to be assessed on 1/4th of the income determined in the case of Hamdard Dawakhana Trust.
3. ' We therefore, reply the question in the affirmative.