9911796707
TMI Blog2002 (2) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... The issue raised in all these appeals is common and the facts and circumstances relating to the said completed issue are also similar. Therefore, all these four appeals are clubbed together for disposing them of by a common order. 3. The said private family trust, namely M/s Sreevidya Family Trust, is running a business by name M/s Sreevidya Enterprises. The four assessees in these appeals before us are the beneficiaries of the said Trust. The income of the Trust was first assessed in its hands. The Trust has allocated its income among the four beneficiaries on the basis of the ratio stipulated by the trust dispensation. (It is an oral trust). In appeal, in the case of the assessment of the family trust, the CIT (Appeals) held that the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in giving a finding that the appellant was not dependent on the testator for support and maintenance. 4. It is not correct to state that the dependence condition is to be strictly construed and examined at the time of each assessment and not at the date of creation of the trust. 5. The learned CIT(A) failed to note the fact that the capital required for having the 'income from other Sources' itself had emanated from the Trust only. A comparison is now sought to be now made after 10 years of creation of the Trust, when notionally the income of the beneficiaries would be high. In fact, it is to provide for this income that the Trust was created. 6. The learned CIT(A) erred in concluding that section 161 is a section intended to fight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate share provided in the trust dispensation. He pointed out that once the individual beneficiaries are assessed taking recourse to section 166 of the Income-tax Act, 1961, the position cannot be reverted and the provisions applicable to the assessments of income in the hands of the Trustees cannot be made applicable to the assessments to be made in the hands of the beneficiaries individually. The learned Chartered Accountant also submitted that there is no provision in the Income-tax Act to levy maximum marginal rate on a portion of the income disclosed in the hands of an individual assessee. Therefore, he submitted that the Assessing Officer may be directed to adopt normal rate of tax in respect of the share income of the assessees alloca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions prescribed and for the income derived out of business, the maximum marginal rate might be applied. But, where the beneficiaries are assessed individually, for their share income from the trust along with other incomes, if any, there is no provision of law contained in the Income-tax Act to apply the rule of maximum marginal rate in such cases. There is no option available for the assessing authority to apply the maximum marginal rate of tax either in the case of the trustee or in the case of the beneficiaries. The option is available only for completing the assessment either in the case of the trustee or in the case of the beneficiaries. But the application of the maximum marginal rate would be possible, subject to the condition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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