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TMI Blog1978 (4) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the previous year ended 31st Nov., 1974. 2. Since the terms and conditions of the trust deed involved in the case of Smt. Gangammabai Gundappa Raghoji Trust dt. 23rd Aug.,1973 are similar to the terms and conditions of the Trust Deed also dt. 23rd Aug., 1973 in the case of Raghoji Family Trust, except the quantum of the amount settled on trust, he shares of the beneficiaries in the net income of the trust fund and some other minor terms and conditions, we are reproducing some of terms and conditions of later trust in the latter part of this order. It is an admitted position that whatever is the decision on the terms and conditions of these terms, the same be equally applied to the terms and conditions of the other trust. Briefly state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or payment of Life Insurance premia on the life of the said Rajendra Kumar Somanna Raghoji as well as for any other expenses which may have to be incurred for the said Rajendra Kumar Somanna in case of emergency with powers to the Trustees to accumulate the whole of the said income or such part thereof as may not be applied for such maintenance, visit to foreign countries and such other expenses as are herein above referred to and invest the same in one or more of the investments hereinafter authorised and the resulting income of the investments so that all accumulations so made and the investments for the time being representing the same shall for all purposes be treated as corpus or capital and upon the expiration of the period of 18 year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in question addressed himself on the following two issues: (1) "Whether the individual shares of the person on whose behalf or for whose benefit income is received by the trustees are determinate and (2) Whether the income is specifically receivable by the trustees on behalf of or for the benefit of the beneficiaries". He, after examining the terms and conditions of the trust deed and for the reasons stated in the assessment order has come to the conclusion that the trustees can distribute fund and accumulate income in third year in disregard of the share of the beneficiaries as given in the trust deed because there is no third party to question their best judgment; the trustees can distribute the trust fund in the following manner: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the income was taxed in the hands of the assessee trust at rate applicable to an "association of persons." 6. Similar view has been taken by the ITO in the case of the other trust. 7. Aggrieved by the said assessments the assessee trust brought the matters by way of appeals before the AAC. He for the reasons stated in the appeal order has held that since beneficiaries did not have any other income chargeable under the Act and since the income receivable by them under respective trust was known and determinate, proviso to s. 164 of the Act was attracted in the present case. The ITO was, accordingly, directed in the case of each of the assessee to subject each of them to tax the income of the trust at the rate appropriate therefor. In oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contingency which may come to pass in future. So long it is possible to say on the relevant valuation date that the beneficiaries are known and their shares are determinate, the possibility that the beneficiaries may change by reasons of subsequent event such as birth or death, would not take the case out of the ambit of sub-s. (1) of s. 21. The position has to be seen on the relevant valuation date as if the preceding life interest had come to an end on that date and if, on the hypothesis, it is possible to determine who precisely would be the beneficiaries and on what determinate shares, sub-s. (1) of s. 21 must apply and it would be a matter of no consequence that the number of beneficiaries may vary in the future either by reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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