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TMI Blog2014 (8) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... se 50% of the income and their respective shares were to be accumulated as a special fund in the hands of the trustees for 19 years and the same were to be paid after a period of 19 years, it cannot be said that the Trust is discretionary Trust and/or the Trust is not a specific Trust - the assessee Trust is a specific Trust and therefore, not subjected to the tax at the maximum marginal rate u/s 164 of the Income Tax Act, 1961- Decided in favour of Assessee. - Income Tax Reference No. 67 of 1995, Income Tax Reference No. 11 of 2001 - - - Dated:- 5-8-2014 - M. R. Shah And K. J. Thaker,JJ. For the Appellants : Mr. S. N. Soparkar, Mrs. Swati Soparkar For the Respondents : Mr. M. R. Bhatt, Mrs. Mauna M. Bhatt JUDGMENT ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontains the said 10 beneficiaries of ScheduleI with specific shares as per clause III(b)(ii) of the Trust Deed. That as per the Trust Deed the distribution of the income is to be made as directed in the Trust Deed i.e. 50% of the income of the Trust shall be received by the beneficiaries of Schedule-I and 50% of the income of the Trust shall be received by the Trustees of the Trust on behalf of the beneficiaries of the Schedule-II of the Trust Deed. As per the Trust Deed, the income of the beneficiaries in the Schedule-II is receivable for and on behalf of them by the Trustees of the Trust, as the said income is to be accumulated as a special fund, Corpus for a period of 19 years. Meaning thereby, 50% of the income of the beneficiaries as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.No. Name of Beneficiary Share of Beneficiary 1 Minor Kalpna Bhagwandas 5% 2 Minor Mahesh Bhagwandas 5% 3 Minor Lalo Bhagwandas 5% 4 Minor Devila Prabhudas Patel 5% 5 Minor Savita Prabhudas Patel 5% 6 Minor Hitesh Prabhudas Patel 5% 7 Minor Nitesh Prabhudas Patel 5% 8 Minor Janak Pramodbhai Patel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the same, the learned CIT set aside the assessment orders for both the years i.e. 1982-83 and 1983-84 and directed the ITO to subject the income allotted to ScheduleII to tax at the maximum marginal rate in the hands of the Trustees and to take consequential action for the levy of statutory interest under section 139 etc. That the assessee preferred appeals before the learned Tribunal and the learned Tribunal has dismissed both the appeals of the assessee and thereafter at the instance of the assessee, present reference application being Income Tax Reference Application No.67/2005 is made. However, in the subsequent year for AY 1984-85 and 1985-86, the learned Tribunal took the contrary view and held that the assessee Trust is a specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of 50% after 19 years. 4.2 Having heard learned Counsel appearing on behalf of the respective parties and considering the Trust Deed more particularly the share allotted to the respective beneficiaries Schedule-I and Schedule-II, it appears that the shares which are allotted to the respective beneficiaries even with respect to Schedule-I and Schedule-II are specific shares and therefore, the same can be said to be determinative shares. Merely because 50% of the income and their respective shares were to be accumulated as a special fund in the hands of the trustees for 19 years and the same were to be paid after a period of 19 years, it cannot be said that the Trust is discretionary Trust and/or the Trust is not a specific Trust. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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