1998 (1) TMI 5 - SCH - Income Tax

Discretionary Trust - whether on the distribution of the profits amongst the beneficiaries the assessment was to be made under section 161 or whether the trust was to be assessed under section 164 as an association of persons for the reason that it was a discretionary trust - held that income should be assessed in hands of beneficiaries

Summary

The Supreme Court ruled that in a case involving the assessment of profits distributed among beneficiaries of a trust, the income should be assessed in the hands of the beneficiaries. The Court referred to a previous decision in CIT v. Kamalini Khatau [1994] 209 ITR 101 to support this conclusion. The appeals were allowed in favor of the assessee with no order as to costs. (Case citation: 1998 (1) TMI 5 - SC)