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TMI Blog2019 (3) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... ot simply arise because will be applicable only if the share of the beneficiaries is unknown or indeterminate. Tribunal was perfectly justified in invoking Section 62(2) of the Act read with Section 61(1) of the Act which would apply only to the Revocable Transfer of the funds made for a period which is not specified and these above circumstances, it would be taxable in the hands of the Transferor/beneficiaries and not in the hands of the Trust. As a matter of fact, the findings rendered by the Tribunal are mere findings of facts and on application of relevant provisions of the Act which, in the facts of the case, does not give rise to a substantial question of law requiring our consideration under section 260A of the Act. The appeals are, thus, found devoid of merits and the same are liable to be dismissed. - Decided in favour of assessee. - Tax Case Appeal Nos.122 and 123 of 2019 And C.M.P.No.3227 of 2019 - - - Dated:- 11-2-2019 - Dr. Justice Vineet Kothari And Mr. Justice C.V. Karthikeyan For the Appellant : Mr.T.Ravikumar Senior Standing Counsel For the Respondent : Mrs.Pushya Sitaraman for Mr.Arun Kurian Joseph COMMON JUDGMENT DR.VINEET KOTHARI, J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axed in respect of the said income distributed to them by the said Trust. The Tribunal invoked Section 61 of the Income Tax Act, 1961 and held that the income arising by virtue of a revocable transfer of assets shall be chargeable to the income of the transferor and shall be included in his total income. The relevant paragraph of the order passed by the Income Tax Appellate Tribunal is quoted below for ready reference:- From the above extracts of the Paper Book, which are extracted from the Trust Deed and the contributor's agreement, it is evident that the assessee is not carrying on any business with commercial motive. The beneficiaries of the trust are identifiable and the shares are determined by contributor's agreement and the contributors are free to call upon the Trust to cancel any units held by them and return the value. Therefore, the trust is revocable trust and squarely covered by section 61 of the Income Tax Act. Accordingly, we hold that Trust is a revocable Trust and the income derived by the assessee required to be taxed in the hands of the beneficiaries in accordance with the provisions of section 61 and 161(1) of Income Tax Act. This view is suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased by them were also specified. Therefore, the income already taxed in the hands of the beneficiaries cannot be again taxed in the hands of the Assessee Trust itself. No double taxation is permitted in the Scheme of the Act, she urged. 6. She further urged that the Contribution Agreement dated 18.11.1996 was a part of Trust Deed which was later entered on 29.11.1996 wherein in specific terms, the Contribution Agreement as well as Beneficiaries have been defined. She further submitted that the Trust Period as defined in clause 'w' of the Trust Deed also clearly stipulates that the Trust Period means the period from the date hereof (29.11.1996) until such date as shall be agreed by one hundred percent (100%) in interest of the Contributors. Referring to clause 6.03 in the Contribution Agreement dated 18.11.1996, the learned Senior Counsel submitted that at the end of 3 years, each Contributor is entitled to call upon the Trustee to cancel all or part of the Units held by it and return the nominal value thereof of such cancelled Units. Therefore, she submitted that the contributions by these 3 companies, was, undoubtedly, a Revocable Transfer of assets/funds to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any part thereof is not specifically receivable on behalf or for the benefit of any one person or where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown (such income, such part of the income and such persons being hereafter in this section referred to as relevant income , part of relevant income and beneficiaries , respectively), tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate. 9. In view of the clear Scheme of the Act and the provisions quoted above, we find little force in the submission made by the learned counsel for the Revenue. Section 62(2) clearly stands attracted to the present case. The funds and transferred by the beneficiaries viz., the 3 Companies to the Trust created by the Settlor viz., State of Tamil Nadu were revocable after the specified period of three years. But, besides being Settlor, also a contributor of funds to the Trust in question, since the Units were revocable after a period of 3 years, at any point of time, irrespective of the fact whether they have been actually revoked or not or contributi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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