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TMI Blog2017 (11) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is allowed. - I.T.A. No. 726/Kol/2016 - - - Dated:- 13-10-2017 - Shri P.M. Jagtap, AM For The Assessee : Shri Akkal Dudhwala, ACA For The Revenue : Shri Arup Chatterjee, Addl. CIT ORDER This appeal filed by the assessee is directed against the order of Ld. CIT (Appeals) 13, Kolkata dated 22.01.2016 and the grounds raised therein by the assessee are as under: 1. That the appeal is directed against the order of Ld. CIT(A)-12, Kolkata. 2. That the cases is directed towards the single issue involved about the action of Ld. CIT (A) to upheld the act of the Ld. ITO in applying the maximum marginal rate of tax (at 30%) on the trust in spite all the conditions of section 161(1) of the Income Tax Act 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stha Kajaria. 7. That the ld. CIT (A) has erred the law by observing that the first leg of section 164(1) is applicable, whereas the fact and evidences are against the applicability of section 164(1) of the Income Tax Act 1961. 8. That the assessee carves leave to add, alter or amend any ground before or at the time of hearing. 2. The assessee in the present case is a single beneficiary private trust with a single beneficiary Master Shrestha Kararia who was a minor. The return of income for the year under consideration was filed by it after making payment of tax at normal slab rate as applicable to the individual. The said return was processed by the AO under section 143(1) and vide an intimation dated 30.08.2013, the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficiary were not determinate. It was contended that both these conditions were not applicable in the case of the assessee since the beneficiary was known and he was entitled to 100% income. Reliance in support of these contentions was placed on behalf of the assessee on the various case laws. 3. The submissions made by the assessee were considered by the Ld. CIT (A). He first discussed the pre-requisite of private trust in his impugned order and then proceeded to discuss and deliberate upon the various case laws relied upon by the assessee. He also discussed other case laws on the issue before finally upholding the intimation issued by the AO under section 143(1) taking the status of the assessee as AOP for the following reasons given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bombay High Court in the case of CIT vs BA. Sangkrajka Trust (1990) 181 ITR 484 has taken a different opinion contrary to that of the Gujarat High Court. However, there is no such reference of the Bombay High Court in the Gujarat High Court case. As far as the Calcutta High Court Court s case is concerned, from the tenor of the judgment, it is not clear as to whether the trust deed contained various options in the event of the would-be wife not coming into existence of the assessee s son did not marry at all. In this context the Madras High Court in the case of L. Gouthamchand (supra) at page 447 has observed that as a matter of fact, it was verified that the assessee was married subsequently and so the beneficiary was found to be know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Trust Ors. Vs CWT (SC) 240 ITR 409 Aggrieved by the order of the Ld. CIT (A), the assessee has preferred this appeal before the Tribunal. 5. I have heard the arguments of both the sides and also perused the relevant material available on record. The learned counsel for the assessee has submitted that the assessee trust was regularly assessed as individual in all the earlier years and its status was changed to AOP for the first time in the year under consideration and that too while processing the return of income under section 143(1). He has contended that the Ld. CIT (A) has upheld the intimation issued by the AO under section 143(1) on this issue relying on certain case laws which are distinguishable on fact. He has submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (A) as well as before us and the case laws discussed by the Ld. CIT (A) in his impugned order and relied upon by the learned counsel for the assessee in support of the assessee s case, I find merit in the alternative contention of the learned counsel for the assessee that the issue relating to the determination of the status of the assessee as well as the rate of tax applicable to it is highly debatable and the same is beyond the scope of adjustment permissible under section 143(1). I, therefore, accept the alternative contention raised by the assessee and setting aside the impugned order of the Ld. CIT (A), I direct the AO to take the status of the assessee as claimed in the return of income and levy tax accordingly. 7 . In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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