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TMI Blog2017 (10) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the fund. The Ld. CIT(A) while appreciating the facts of the present case has rightly held that the trust deed mentions that units shall be issued to the contributors who are entitled to the specific share of the profits. No new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld CIT (A). Since the Ld. CIT(A) while deciding these grounds have relied upon the orders passed by Hon'ble ITAT in identical circumstances and even on the principle of consistency also, the Ld. CIT(A) has rightly held that the income from the contributions made by the beneficiaries of the trust is taxable only in their hands and not in the hands of the assessee. Therefore, there are no reasons for us to interfere into or deviate from the findings recorded by the Ld. CIT (A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned Whether income of the assessee is taxable in the hands of contributors/beneficiaries as per section 161(1) of the I.T. Act, 1961, and not in its own hands in status of an A.O.P.? - Held that:- CIT(A) has categorically held that as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I.T. Act, 1961, and not in its own hands in status of an A.O.P.; 5. On the facts and circumstances of the case and in Law, the Ld. CIT (Appeals)has erred in holding that income received by the assesse from complex commercial lending business is not Income from Business and Profession', but Income from Other Sources".. 2. As per the facts of the present case, the assessee is a trust registered as venture capital fund with SEBI under SEBI (Venture Capital Fund) Regulations, 1996. The assessee has earned interest income of ₹ 1,17,16,237, which has been allocated to the contributors. The assessee filed its return of income declaring total income at Rs. NIL on 31.07.11. Subsequently, the case of the assessee was selected for scrutiny and after serving statutory notices and seeking reply of assessee, the AO passed assessment order u/s 143(3) thereby assessing the income at ₹ 1,17,16,327/- by making additions. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties partly allowed the appeal of the assessee. Now before us, the revenue has preferred the appeal by raising the above ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the trust deed. Further, the Trust could not be regarded as an Association of Persons (AOP) as the beneficiaries had not set up the trust; they had not come together with the object of carrying on investment in a mezzanine fund, which was the object of the trust; and there was no-.inter se agreement between the beneficiaries of the fund. 4.11. In the present case also, the Trust Deed mentions that Units shall be issued to the Contributors.-who are entitled to a specific share of the prof its. As per para 2.6 of the Trust Deed on page 15, the Trustee shall invite capital commitments of minimum ₹ 5 Crore and receive capital contributions only by way of private placement of the units in the fund to the target investors. Hence, it is a case of a determinate Trust: 4.12. It needs to be examined whether the transaction constitutes a revocable transfer u/s 61-63 of the Act. A transfer is deemed revocable if It contains a provision for the retransfer of, or gives the transferor a right to re-assume power over the whole or any part of any income or assets to the transferor, i.e., whether directly or indirectly, As per clause 2.9(c)(i)(c) on page 16, the Trust Deed states tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there was no inter se agreement between the beneficiaries of the fund. The Ld. CIT(A) while appreciating the facts of the present case has rightly held that the trust deed mentions that units shall be issued to the contributors who are entitled to the specific share of the profits. No new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld CIT (A). Since the Ld. CIT(A) while deciding these grounds have relied upon the orders passed by Hon'ble ITAT in identical circumstances and even on the principle of consistency also, the Ld. CIT(A) has rightly held that the income from the contributions made by the beneficiaries of the trust is taxable only in their hands and not in the hands of the assessee. Therefore, there are no reasons for us to interfere into or deviate from the findings recorded by the Ld. CIT (A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, these grounds raised by the revenue stands dismissed. Ground No. 5 5. This ground raised by the revenue is against challenging the order of Ld. CIT(A) in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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