1. The Revenue having lost before the Income-tax Appellate Tribunal, Madras Bench, the following questions were referred to this court at its instance :
'(i) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the provisions of section 168 would not apply to the facts of the case and that the entire income from all the properties bequeathed under the will cannot be taxed in the hands of the executors as a single unit
(ii) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the shares of the beneficiaries are know and determinate and that, therefore, the provisions of section 164 would not apply
(iii Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the income from hotel business and income from property at Sunkurama Chetty Street alone should be taxed in the hands of the assessee as income received by the trustees
(iv) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the provisions of section 160(1)(iv) alone would apply to the facts of the case, and that the tax liability has to be determined in respect of section 161(1) ?'
2. The two appeals, I.T.A. Nos. 784 and 1953/73-74, relate to the assessment years 1969-70 and 1970-71, respectively, but concern the same assessee. At the outset, it is relevant to point out that the questions of law referred to this court are confined to the immovable assets, viz., Hotel Dasaprakash at Nos. 49, 50 and 51, Poonamallee High Road, Madras, and Modern Cafe, Esplanade, Madras, and all other movable assets, furnitures fitting and fixtures and all the rights, goodwill, etc., attached to and belonging to the said hotels. It is common ground that the appreciation of these questions depends solely on the construction of the will dated January 7, 1968, executed by the deceased, K. Seetharama Rao, particularly bearing in mind the intention of the testator. According to the Revenue, the income has to be assessed in the hands of the executors as named in the will as a body of persons as provided under s. 168 of the I.T. Act (for brevity hereinafter referred to as 'the Act'). Alternatively, it is contended by the Revenue assuming that the said movable assets are being managed by the trustees, yet, in the circumstances of the case, the income from the hotel business and the income from the property at Sunkurama Chetty Street should be taxed in the hands of the assessee as income received by the trustees in accordance with s. 164 of the Act.
3. It is relevant to notice that the ITO assessed the income in the hands of the trustees as a single assessment for the accounting year 1969-70; so far as the subsequent year is concerned, the ITO adopted the same reasoning as in the case of the preceding assessment year. The AAC held that the above income should be assessed under s. 160(1)(iv) and that the income from the said business had to be assessed in the hands of the beneficiaries, as according to him, the shares of the beneficiaries are determinate. The Income-tax Appellate Tribunal also held that the hotel properties including the property at Sunkurama Chetty Street vested in the trustees immediately on the demise of the said Seetharama Rao and that the assessment should be made in accordance with s. 160(1)(iv).
4. It is not in dispute that under the will, immovable properties as also movable assets were the subject-matter of disposition, that the testator appointed nine individuals both as his executors and administrators of the will and also as trustees in respect of the trust set out in the will. We must at once point out that if on the construction of the will, the management of these two hotel businesses were to vest in the executors, certainly, s. 168 of the Act will be attracted; so too, if the properties on the demise of Seetharama Rao came to best forthwith in the hands of the trustees, there is no scope for the application of the said provision. Therefore, the immediate question is whether these movable assets vested in the trustees or on the executors on the demise of the testator. A close reading of the will as a whole will unmistakably point out that the testator had specifically earmarked the duties to be performed by the trustees on the one hand and those to be performed by the executors on the other. A careful examination of cls. 8,9,10,11 and 19 which we will be setting out hereinafter will indisputably point out so far as these movable assets are concerned, they came to vest in the trustees on the demise of the testator. We must reiterate that the same nine individuals were appointed both as executors and administrators under the will. Clause 8 provides that the hotel Dasaprakash together with all other movable assets, fixtures, were bequeathed to all his sons by first and second wives but in view of there being liabilities due by him, the liabilities would have to be discharged and that the property shall vest in the trustees. Again, in the same clause it is stated that the trustees shall forthwith hold the properties in trust for the benefit of all his sons and receive the income therefore for the benefit of his sons equally, subject to the annuities and legacies referred to thereunder and subject to the other conditions laid down in this behalf in respect of the said properties and liabilities charged upon them. It is further provided, should there be any vacancy in the office of the trustees, the other trustees might co-opt any suitable person. Under clause 9. it is provided that the Hotel Dasaprakash, a partnership concern, shall in the event of his death stand dissolved and that the trustees shall take possession of the property and without stoppage, carry on the hotel business for the benefit of his sons and hold the income from the business of Hotel Dasaprakash, after payment of the annuities reserved thereunder, for and on behalf of the beneficiaries, viz., all his sons. The trustees were authorised to borrow for the purpose of discharging any of the liabilities which required immediate payment and for the purposes of the business and to offer as security any of the properties for the aforesaid purposes. There is also a further direction to the trustees in clause 10 that if the trustees were to consider that for duly discharging the aforesaid liabilities and to meet any sudden demand that it is advisable to provide for substantial cash, they might to so, and the beneficiaries shall not question the quantum of such provision, and also that, after all the liabilities on the testator's estate had been discharged, the trustees shall vest the property and deliver possession of the same along with the business to all his sons and the trustees shall stand discharged thereafter. It is not necessary to mention the particulars of the annuities, as they are not relevant for the occasion. Clause 11 envisages that the trustees shall diligently manage the business to the best of their ability and strive to discharge all the liabilities in respect of the aforesaid properties for which they have been constituted as trustees. Clause 14 deals with the business of Modern Cafe, Esplanade, Madras, and its branch activities both at Egmore and Basin Bridge with all liabilities and assets attached thereto. This business was also bequeathed to and in favour of all his sons by first and second wives equally subject, however, that this item of the property, viz., Modern Cafe and the branches, referred to above, shall also best in the aforesaid trustees who shall administer the same including the business thereof likewise until all the testator's liabilities are discharged where after they shall vest the property in the testator's sons. In clause 19 of the will, there is the following provision :
'My executors shall, on my death, vest the properties movable or immovable belonging to me pertaining to 'Hotel Dasaprakash' and No. 20, Sunkurama Chetty Street and the business assets of 'Modern Cafe', Esplanade, Madras, and its branches in the trustees as hereinabove mentioned and do all that is necessary for realisation of the other assets, for taking a probate of this will for determining the liabilities including the estate duty and other revenue liabilities and thereafter they shall best the property to the beneficiaries under this will as set out hereinabove. The executor-trustees shall not close down any of the business and for keeping them running may enter into any arrangements with the beneficiaries as may be necessary including the permission to run the business on such terms and conditions the executor-trustees may lay down. My executors and trustees shall ordinarily act jointly but may act severally whenever circumstances so require, if they agree to the same jointly in writing.'
5. The opening sentence extracted above explicitly mandates that the executors shall no the demise of the testator vest the properties, movable or immovable, pertaining to the testator belonging to Hotel Dasaprakash and No. 10, Sunkurama Chetty Street and the business assets of Modern Cafe, Esplanade, Madras, and its branches in the trustees as hereinabove mentioned, it is useful to notice that in the statement of the case, there is a reference that aliquot part of the income was credited for each beneficiary's account. This conduct on the part of the executors-cum-trustees is ample proof that the executors as explicitly directed by the testator bested these movable properties in the trustees immediately on the demise of the testator. In the fact of such clear direction, unequivocally expressed by the testator in his last will and testament, we are of the opinion that there can be no room for the contention that these movable assets, viz., the two hotel business, continue to vest in the executors named in the will. We have also referred to other clauses wherein the trustees were specifically authorised by the testator to make borrowings and to offer securities if need be for such borrowing and retain substantial case if the exigencies of the hotel business required it and that the beneficiaries shall not question such appropriation of cash by the trustees for the purpose of the business. We have to reiterate that no other construction is possible and consequently, the contention of the Revenue that these properties came to vest in the executors named in the will who also happen to be the trustees and s. 168 of the Act is the proper provision that would govern the assessment, is hardly acceptable.
6. Learned counsel for the Revenue laid emphasis on the following finding of the Tribunal :
'It is amply clear that the executorial functions in respect of all assets left by the late Sri Seetharama Rao had not ceased to function as executors and had not been discharged and as such, the executors had not become trustees in respect of all properties.'
7. According to us, such a finding cannot be sustained on the plain language employed in the will and on the construction we have made, as above. Indeed, we find no reasoning in the order passed by the Tribunal to justify such a finding; apparently, the Tribunal concentrated its attention more on the alternative contention than this particular question revolving on s. 168 of the Act.
8. Nevertheless, great emphasis is placed on the following recital found in para, 20 of the will :
'The executors-trustees shall not close down any of the businesses and for keeping them running may enter into any arrangements with the beneficiaries as may be necessary including the permission to run the business on such terms and conditions as the executors-trustees may lay down',
in support of the contention that the business came, and continued, to vest in the executors immediately on the demise of seetharama Rao and that so far as there was no evidence that the nine individuals shed their character as executors, these movable properties also continued to vest in the executors. We are unable to agree, for, the will has to be read as a whole. We have already pointed out that the testator had demarcated the duties of the executors as also those of the trustees; so too. There is a clear division of responsibilities placed on the executors on the one hand and the trustees on the other. The reference to the executors-cum-trustees in the winding-up portion of the will has to be understood as describing the nine individuals holding the dual character of executors-cum-trustees.
9. In the above view we have taken, there is no real need to refer, in detail, to the decisions cited by the Revenue viz., V. M. Raghavalu Naidu and Sons v. CIT : 18ITR787(Mad) , Executors of estate of J. K. Dubash v. CIT  19 ITR 182 , Estate of Chockalingam Chettiar v. CIT : 40ITR429(Mad) , CIT v. Estate of Late Ramaswami Pillai : 46ITR666(Mad) and CIT v. Estate of V. L. Ethiraj : 120ITR271(Mad) . The last decision. To which one of us was a party, turned on s. 9 of the Official Trustees Act. In V. M. Raghavalu Naidu and Sons v. CIT : 18ITR787(Mad) , it was found that the executor had not been divested of the estate, that the residue had not been ascertained and, consequently, the trust fund could not have vested in the executors was trustees. In Executors of Estate of Dubash v. CIT  19 ITR 182 , the Supreme Court held that on the death of the testator the estate including the business got vested in the executors and they carried on the business within the meaning of s. 3 read with s. 10 of the Indian I.T. Act (XI of 1922. What was laid down in CIT v. Estate of Late Ramaswami Pillar  46 ITR 666 was that there is no invariable rule that an executor cannot shed his character as an executor and assume the character of a trustee under the will, before all the debts are discharged and lagacie are paid; and that he can vest the property in the lagacies with mutual consent and hold the legacies as a trustee even before all the debts are discharged. In Estate of Chockalingam Chettiar v. CIT : 40ITR429(Mad) , this court has held that the office of an executor was distinct from that of a trustee, that so long as he was an executor, he held the property of the deceased in his own right as his legal representative and not on behalf of the beneficiaries and that he would continue to hold in that capacity till the estate was cleared by the payment of debts, testamentary expenses and specific legacies; in other words, after clearing the debts and paying the funeral and testamentary expenses, the specific legacies had to be paid and the surpluses ascertained and then when there was assent to the vesting of the residue, the executor would be held to have shed his character as executor and would hold the property as a trustee for the legatees, etc., the same principle is reiterated by the Bombay High Court in Court Receiver v. CIT : 54ITR189(Bom) . In the instant case, we have found that by virtue of the express direction contained in the will, the executor had to, on the death of the testator, vest the movable properties in the trustees. It is, therefore, we stated, that there is no necessity to apply any of the principle laid down by the above decision.
10. We now turn to the alternative contention, viz., even assuming that these movable assets came to best in the trustees on the demise of the testator, yet the income had to be assessed on the trustees as a association of persons, but not in the hands of the individual beneficiaries. In this context, reliance is placed on cls. 1,8,9,10,11 and 20 of the will in support of their above contention. We have already referred to these clauses while dealing with the other point. The emphasis is made on the following circumstances : (a) The properties had been vested with the trustees until the time of discharge of all the liabilities pertaining to the estate. (b) The trustees shall take possession of the property and without stoppage carry on the hotel business for the benefit of the testator's sons. (c) All the liabilities due to bank, private parties and taxes shall be discharged out of the amounts payable to the nine beneficiaries (sons of the testator). (d) The trustees are authorised be borrow for the purpose of discharging any of the liabilities and to offer security for such borrowing. (e) A clog on the beneficiaries' rights to draw amounts standing to their credit, i.e., only if there is substantial cash available and there is no likelihood of any prejudice to the property or business, the beneficiaries are entitled to draw amounts standing to their credit. (f) The absolute discretion vested with the trustees to provide for substantial cash for discharging liabilities and for meeting any sudden demand. (g) The trustees shall stand discharged after all the liabilities on the estate had been discharged. (h) The trustees shall thereafter hand over possession to all the beneficiaries. (i) The discretion vested with the trustees to manage the business to the best of their ability, and (j) The direction to the trustees that they shall not close down by of the business but shall keep them running. On the strength of the above circumstances, it is strenuously contended by the learned counsel for the Revenue that though the shares of the beneficiaries are specified in the will, yet the actual quantum to which each of the beneficiaries will be entitled ultimately is indeterminate and that, therefore s. 164 is simply atracted and a single assessment has to be made in the hands of the trustees as an association of persons. It is, therefore, necessary to refer to s. 164 of the Act. It is pertinent to note that for the assessment years under consideration, s. 164 as it stood before April 1, 1971, is the relevant provision. It runs thus :
'Where any income in respect of which the persons mentioned in clauses (iii) and (iv) of sub-section (1) of section 160 are liable as representative assessees or any part thereof, is not specifically receivable on behalf or for the benefit of any one person, or where the individual shares of the persons on whose behalf or of whose benefit such income or such part thereof is receivable (which persons are hereinafter in this section referred to as the beneficiaries) are indeterminate or unknown, tax shall be charged as if such income or such part thereof were the total income of an association of persons, or, where such income or such part thereof is actually received by a beneficiary, then at the rate or rates applicable to the total income of the beneficiary if such course would result in a benefit to the Revenue.'
11. Two conditions have to be satisfied to invoke the operation of s. 164(1) the income must be receivable for the benefit of the beneficiaries, and (2) the individual shares of the beneficiaries are indeterminate or unknown. This takes us to the question whether, in the circumstances of the case, the individual shares of the beneficiaries are indeterminate or unknown as contended by the Revenue or determinate or known as argued by the assessee, which contention found favour with the Tribunal. The test is whether the individual shares of the beneficiaries are indeterminate or otherwise. What is material, therefore, is whether under any instrument - be it testamentary or non-testamentary, the share of every beneficiary, if there are more than one, is quantified in the deed itself. It would. Therefore, follow that it is unnecessary whether, in the instrument, such specified share is quantified in terms of rupees and paise or not. That in our view is what is visualised under s, 164 of the Act. It is not in dispute that the shares of the beneficiaries are specified in the will of late Seetharama Rao. The beneficiaries are the sons born to the first and second wives of late Seetharama Rao and all the income equally. Then there can be no difficulty in holding that the individual shares of the beneficiaries are known as urged by the assessee, but not determinate or unknown as urged by the Revenue. Indeed, in clause No. 10 of the will, there is a specific direction that :
'The trustees shall maintain proper accounts and out of the net annual income being computed as per commercial accounting after all outgoings, including interest, tax on property and the like, they shall pay the specific annuities set out here below and the balance sum shall be credited equally to the account of each of mu sons,'.
12. This will also clearly indicate that the individual shares of every one of the beneficiaries is determinate. The fact that some fetter was imposed by the testator himself on the beneficiaries withdrawing the amounts, will have no impact upon the individual shares conferred specifically upon every one of them, so too, the authorities conferred on the trustees by the testator to make borrowings and the discretion vested with the trustees to apply substantial cash if need be for the purpose of discharging the liabilities or for meeting any sudden demand will not in any way mitigate the individual shares to which every one of the beneficiaries is declared to be entitled under the will; to reiterate, the authorities granted to the trustees as referred to above, are only for the purpose of effectively running the hotel businesses, viz., Dasaprakash and Modern Cafe, but have nothing to do with the individual specified shares of the beneficiaries. As a matter of fact, even if the moneys were to be utilised by the trustees for discharging the liabilities and for meeting any sudden demand, yet ultimately all income would have to be apportioned between the beneficiaries equally; while so, we are unable to countenance the argument of the Revenue that because there are certain fetters placed on the beneficiaries in the withdrawal of the amounts or because the trustees were vested with certain power of borrowings and securing such borrowings, the individual shares of the beneficiaries are indeterminate or unknown. Our above approach finds support from a decision of this court in CIT v. Estate of Ramaswami Pillai : 46ITR666(Mad) , cited supra. It is true, the learned judges were concerned with s. 41 of the Indian I.T. Act, 1922. But the Division Bench was concerned with a similar provision as the one under consideration, and, therefore, we are in order in taking inspiration from the said decision.
13. The other question that was also referred for the consideration of this court is :
'Whether, on the facts and in the circumstances of the case. The Appellate Tribunal was right in holding that the annuity deposit refund along with interest and the dividends received by the assessee cannot be brought to tax in the hands of the assessee ?'
14. Following the reasoning we have adopted with reference to questions Nos. (i) to (iv), this question has necessarily to be answered in the affirmative and against the Revenue and is answered accordingly.
15. The result is, the Revenue fails. Questions (i) to (v) are answered in the affirmative and against the Revenue. The assessee will be entitled to the affirmative and against the Revenue. The assessee will be entitled to his costs. Counsel's fee Rs. 500.