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TMI Blog1973 (7) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the hands of the trustees - - - - - Dated:- 5-7-1973 - Judge(s) : UNTWALIA., S. K. JHA. JUDGMENT This is a reference under section 66(1) of the Indian Income-tax Act, 1922, hereinafter called " the Act ", by the Income-tax Appellate Tribunal, Patna. The assessee was an employee of the Tata Steel Co. at Jamshedpur during the relevant assessment year 1960-61, the corresponding accounting year of which had ended on March 31, 1960. The assessee filed a return showing an income of Rs. 28,319 from salary. In the past he had income from divided and interest on securities which was not included in the return. He claimed that the shares and securities held by him were transferred to a trust for the benefit of his daughter and, as such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the trust fund completely vested in the trustees and it was in their absolute discretion during the minority of the assessee's daughter to pay out of income of the trust fund a sum of Rs. 201 per month for her maintenance, education and advancement of benefit. It was not open to the minor daughter to enforce the obligation. In the year of account no money had been paid and thus no benefit accrued to the beneficiary. That being so, relying upon a decision of the Supreme Court in Commissioner, of Income-tax v. Manilal Dhanji they maintained the order of the Appellate Assistant Commissioner in regard to the entire amount of Rs. 6,768 including the amount of Rs. 2,412. On being asked by the Commissioner of Income-tax to make a refere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause. On a closer scrutiny, clause (b) was read in the context of the provision contained in clause (a) and so read according to the decision of the Supreme Court, " the only reasonable interpretation appears to be the one which the High Court accepted, namely, that the scheme of the section requires that an assessee can only be taxed on the income from a trust fund for the benefit of his minor child, provided that in the year of account the minor child derives some benefit under the trust deed-either he receives the income, or the income accrues to him, or he has a beneficial interest in the income in the relevant year of account. But if no income accrues, or no benefit is derived and there is no income at all (so far as the minor child i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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