9911796707
TMI Blog1993 (7) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... several grounds to urge that the CIT(A) erred in excluding the share income from the family trust from the total income of the assessee and, therefore, it was prayed that the order of the CIT(A) should be set aside and that of the Assessing Officer be restored. The facts relevant for the case are that the assessee is a beneficiary of M/s. B.K. Kothari Family Trust. For the assessment year 1985-86, for which the accounting year ended on 24-10-1984, the assessee filed a return of income on 31-3-1986 declaring an income of Rs. 71,320. The Assessing Officer determined the total income at Rs. 1,37,720 including the share income of the assessee as a beneficiary from M/s. B.K. Kothari Family Trust and thus a share income of Rs. 18,765 was include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has assessed the entire trust as an AOP on a total income of Rs. 62,550 by an order dated 25-3-1988. The assessee filed a return of income on 31-3-1986 declaring income of Rs. 71,320 exclusive of the share income from the trust. As indicated earlier, the Assessing Officer has included the enhanced share income from the trust also in the hands of the assessee while computing the total income for the assessment year 1985-86. The contention of the learned counsel for the assessee was that having assessed the share of income of the assessee from the trust on 8-1-1988, it was no longer open to the Assessing Officer to assess the same while computing the assessee's total income in the order passed on 30-3-1988. Therefore, he strongly supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the income is to be computed would apply to that assessment. In appropriate cases, the Assessing Officer may also choose to assess the representative-assessee in respect of that income and limited to that extent the tax may be levied, and recovered from him to the same extent as may be leviable and recoverable from the beneficiary - vide the ruling of the Supreme Court in the case of C.R. Nagappa v. CIT [1969] 73 ITR 626 at page 629. The Supreme Court in the case of State of Uttar Pradesh v. Raza Buland Sugar Co. Ltd. [1979] 118 ITR 50 at page 55 has cautioned against the prohibition of double taxation because the principle that is applicable to the tax statutes is that the income is subject to tax in the hands of the same person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax at the maximum marginal rate of tax, the question of inclusion of such share income from the trust again for rate purposes is not called. Further, we find that the Assessing Officer has assessed the trust itself as an AOP on its total income by an order dated 25-3-1988. In view of the fact that the trust is a specific trust with known beneficiaries and determinate shares the ruling of the Bombay High Court in the case of CIT v. Marsons Beneficiary Trust [1991] 188 ITR 224 would apply and, therefore, the validity of such assessment as AOP is open to question. The Bombay High Court ruled that only representative-assessment should be made in terms of section 161(1) as it was applicable prior to the amendment made by way of section 161( ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
