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TMI Blog2008 (9) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... or A.Y. 1981 - 82 in all the reference applications filed by the revenue, which gave rise to the present Income-tax references. Since identical question is involved in all the Income-tax references, for the sake of convenience, the question is reproduced from I.T.R. No. 01 of 1998 and facts are also taken from the said reference. The question is as under :- Whether the Appellate Tribunal is right in law and on facts in holding that share income of the assessee as a beneficiary from M/s. Bharat Trust / Navbharat Trust, Norma Trust should be assessed on substantive basis ? 2. The respondent in all these references are beneficiaries of main Trust, namely, M/s. Bharat Trust and M/s. Navbharat Trust. The assessees declared be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trust has to be computed and apportioned in terms of the provisions of Section 161 (1) of the Income-tax Act, 1961 and their income cannot be subjected or brought to tax at the maximum marginal rate under Section 164 (1) of the Act. It has, therefore, been contended on behalf of the assessee that the income of the main Trust having been allocated amongst the beneficiaries as per Section 161 (1) of the Act, income received in the hands of the beneficiaries deserve to be assessed on substantive basis. In this view of the matter, the Tribunal upheld the order of the first Appellate Authority in the cases of the beneficiaries involved. 5. Since the reference has been made in the cases of the main Trust i.e. Bharat Trust and Navbharat Trust t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e beneficiary. However, another Division Bench of this Court wherein one of us (K. A. Puj, J.) was a party did not agree with the view taken by the earlier Division Bench and admitted Special Civil Application No. 7110 of 2002 with Special Civil Application No.7244 to 7257 of 2002 on 14.08.2002 and passed an order that having regard to the order dated 30.07.2001 passed by another Division Bench of this Court in Tax Appeal Nos.188 to 228 of 2001, with which the subsequent Division Bench was not inclined to agree, the petitions were ordered to be listed before a larger Bench after obtaining appropriate orders of the Hon'ble Chief Justice. 8. Pursuant to the said order, Full Bench was constituted and vide its order dated 17.09.2003, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted therein. 11. Being aggrieved by the said order of the Tribunal, the revenue has filed Tax Appeals before this Court and all the tax appeals were disposed of by this Court on 26.06.2008. From amongst these tax appeals, the assessees of the present references are also covered. A detailed chart showing the name of the assessee, assessment year, ITR number, name of the main Trust and corresponding Tax Appeal number is furnished during the course of hearing of these references. The same is as under :- Sr. No. Name Asst. Year ITR No. Name of Main Trust High Court Tax Appeal No. 01. Santokben Kanji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the above view of the matter, it was contended on behalf of the respondent - assessee that the issue is squarely covered by the earlier decision of this Court and hence, this Court should dispose of the present references by holding that since the income has already been taxed in the hands of the main Trust and taxes have also been paid by the main Trust, the income taxed in the hands of the beneficiaries - originally on protective basis should be deleted and to that extent, the present references are to be allowed by holding that the Tribunal was not right in law and on facts in holding that share income of the assessee as a beneficiary from M/s. Bharat Trust and Navbharat Trust should be assessed on substantive basis. 13.As against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are accordingly paid, though under KVSS, the same income cannot be now taxed either protectively or otherwise, we follow the said decision, in view of the fact that the revenue is going to challenge the said judgment and order of the earlier Division Bench of this Court before the Hon'ble Supreme Court. Though various authorities were cited before us by the learned Counsels appearing for both sides, since the same were cited before the earlier Division Bench and were duly considered, we deem it fit not to repeat the same here in this judgment. We, accordingly, answer the question referred to in all these references in negative i.e. in favour of the revenue and against the assessee and hold that the Appellate Tribunal was not right in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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