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TMI Blog2000 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... re to be treated as individuals ? (iii) they are not liable to deduct tax at source as per section 194A of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case (the trust being neither an 'individual' nor a 'Hindu undivided family', which alone are exempt from the provisions of section 194A) the levy of interest is unjustified ? 3. Whether, on the facts and in the circumstances of the case--- (i) should the tests of an association of persons or a body of individuals be satisfied in order to assess the trustees as an association of persons or body of individuals ? (ii) do not the trustees satisfy the tests such as common purpose, common action with the common object of producing income ?" Shaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax (Appeals) held that the assessee is not governed by the provisions under section 194A of the Income-tax Act and, therefore, levy of interest under section 201(1A) for both years was cancelled. The Revenue filed appeals as I. T. A. Nos. 666 and 667/Coch. of 1993 before the Income-tax Appellate Tribunal. In paragraph 5 of the order of the Appellate Tribunal, it is stated as follows : "In short if the beneficiaries are definite and if their shares are determinate, the income earned by the trust has to be treated as if the income has been earned by the beneficiaries themselves. Such income has to be assessed in their individual hands. Therefore, the beneficiaries being individuals and the income being assessed in their individual hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of persons for the purpose of assessment in the past as well as for the subsequent years, it claims the status of an individual while considering the applicability of section 194A of the Act. The first appellate authority applied the test laid down by the Supreme Court for assigning the status of an association of persons and relying on the decision of the Bombay High Court held that the trust cannot be treated as an association of persons and, therefore, it is not governed by the provisions of section 194A of the Act. The Tribunal also relied on the decision of the Bombay High Court in CIT v. Marsons Beneficiary Trust [1991] 188 ITR 224 and held that if the income is to be assessed in the individual hands of the beneficiaries, in that, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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