V.S. Desai, J.
1. The assess and his brother had equal shares in an immovable property situate at Bank Street Bombay. On the 26th of September, 1956, each of the assessee and his brother created a trust in favour of his nephew of the undivided half share which each of them possessed in the said immovable property. In the assessee assessment for the assessment year 1957-58, for which the corresponding accounting year was the financial year ending 31st March, 1957, the assessee claimed that the amount of Rs. 6,045 which represented the income of the property conveyed by him in trust for the benefit of his nephew, should be excluded from his income. The Income-tax officer refused to do so on the ground that the said income would be liable to be included in the assessee assessment under the provisions of section 16 (3) (a) (iv) of the Income-tax Act. The Appellate Assistant Commissioner agreed with the view taken by the Income-tax officer and dismissed the assessee appeal. In the further, appeal to the Tribunal however, the Tribunal held in favour of the assessee that the income was not liable to be included in the assessee assessment. According to the Tribunal, the income which was sought to be included did not arise form the property which was transferred by the assessee to his minor son because that property was transferred in favour of his nephew and, consequently, the income could not qualify for inclusion in the assessee income under section 16 (3) (iv). Also the income which the son got was from the property which was transferred in favour of the assessee son by his uncle, and the said income could not qualify to be included under the provisions of section 16 (3) (a) (iv). It may be pointed out that according to the Tribunal as a result of the cross-transfer an equal amount of income had come to the assessee son but the criterion to judge the applicability of section 16 (3) (a) (iv) did not lie in the yield of the quantum of income from the cross-transferred properties, but in the facts as to where the very same property had come indirectly from the father to the son. In that view of the matter the Tribunal was of the opinion that though the cross-transfers were of equals in terms of income or property value, the assessee share in the immovable property did not get transferred either directly or indirectly to his son so as to attract the applicability of section 16 (3) (a) (iv) of the Act.
2. At the instance of the department, it has drawn up a statement of the case and referred to this court the following question arising out of its order under section 66 (1) of the Act :
'Whether, in the facts and circumstances of this case, the sum of Rs. 6,045 being the income from Bank Street property subsequent to September 27, 1956, could be assessed in the hands of the assessee under section 16 (3) (a) (iv) of the Act ?'
3. In our opinion the answer to the question must be in the negative, though not for the reason given by the Tribunal in its order. The view taken by the Tribunal cannot be sustained in the light of the Supreme Court decision in Commissioner of Income-tax v. C. M. Kothari, where in dealing with the provisions of section 16 (3) (a) (iii) in relation to cross-transfers of almost equal value by a father and son in favour of each other's wives, it was held that, for the purpose of section 16 (3) (a) (iii), it was not necessary that the same assets belonging to the husband should have reached the wife. The assets might, in the course of being transferred, be changed deliberately into assets of a like value of another person as happened in that case. A chain of transfers such as those in that case was comprehended by the words 'directly or indirectly' in section 16 (3) (a) (iii). The principle would equally apply to cases falling under section 16 (3) (a) (iv) where the same words 'directly or indirectly' are used. If the present case, therefore, were to be covered by section 16 (3) (a) (iv), we would have taken a contrary view to that taken by the Tribunal. Unfortunately, however, it appears to us that the provisions of section 16 (3) (a) (iv) can have no application to the present case. That provision applies to assets transferred directly or indirectly to the minor child, not being a married daughter, by the assessee otherwise than for adequate consideration. In the present case, however, the assets are not transferred either directly or indirectly to the minor but they are not transferred either directly or indirectly to the minor but they are transferred to the trustee for the benefit of the minor. Now, to such cases the provision applicable would be the provision of section 16 (3) (b), which is :
'.... so much of the income of the any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both.'
4. It will, however, be seen that in this provision the words 'directly or indirectly' in relation to the transfer, which were used in sub-section (3) (a) (iv) of section 16, are omitted. Consequently, it is not possible to avail of this provision in the case of indirect transfers effected by cross-transfers as in the present case. On the wording of this provision, it can apply only to the income of the assets, which are transferred by the assessee to the trustees for the benefit of his wife or minor child. In the present case the income has arisen not from the assets, which are transferred by the assessee in trust for the benefit of his minor son, but from the property which has been transferred in trust for the benefit of the assessee's son by the brother of the assessee. Since section 16 (3) (a) (iv) is inapplicable to the present case and the case is not capable of falling under section 16 (3) (b) also, we do not think that the said item of income is capable of being included in the assessment of the assessee.
5. In the result, therefore, our answer to the question referred to us must be in the negative. The department will pay the costs of the assessee.
6. Question answered in the negative.