9911796707
TMI Blog1995 (1) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... as if it were the total income of an association of persons ? " The matter relates to the income of a trust for the assessment year 1980-81. The trust was created by a registered document, dated September 1, 1978, by Smt. Gallobai. A sum of Rs. 5,000 was credited as trust fund by using which the trustees would hire and exhibit cinematographic films and make profit. Out of the profit earned, 15 per cent. is to be credited to the charity account to be spent for religious and charitable purposes, such as, setting up of a public dharmashala, or public temple or educational institution, feeding of the poor or to set up an institution for medical relief, etc. The remaining 85 per cent. is to go to the four specified beneficiaries in specified p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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) : Provided that in a case where - (i) none of the beneficiaries has any other income chargeable under this Act exceeding the maximum amount not chargeable to tax in the case of an association of persons or is a beneficiary under any other trust, or (ii) the relevant income or part of relevant income is receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt were the income of an association of persons. (3) In a case where the relevant income is derived from property held under trust in part only for charitable or religious purposes or is of the nature referred to in sub-clause (iia) of clause (24) of section 2 and either the relevant income applicable to purposes other than charitable or religious purposes (or any part thereof) is not specifically receivable on behalf or for the benefit of any one person or the individual shares of the beneficiaries in the income so applicable are indeterminate or unknown, the tax chargeable on the relevant income shall be the aggregate of -- (a) the tax which would be chargeable on that part of the relevant income which is applicable to charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of the members of such family, in circumstances where such relatives or members were mainly dependant on the settlor for their support maintenance tax shall be charged on the relevant income as if the relevant income (as reduced by the income if any, which is exempt under section 11) were the total income of an association of persons. Explanation 1. ---For the purposes of this section, --- (i) any income in respect of which the persons mentioned in clause (iii) and clause (iv) of sub-section (1) of section 160 are liable as representative assessee or any part thereof shall be deemed as being not specifically receivable on behalf or for the benefit of any one person unless the person on whose behalf or for whose benefit such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no controversy that the relevant income in the present case will not fall under either of these two categories. Sub-section (3) is applicable in case the relevant income is derived from property held under trust in part only for charitable or religious purposes or is of the nature referred to in sub-clause (iia) of clause (24) of section 2. There is no controversy that the income in this case is derived from property held under trust in part only for charitable or religious purposes. Therefore, the earlier part of sub-section (3) is satisfied in the instant case. Sub-section (3) is in two parts. The first part requires that the income is derived from property held under trust in part only. This requirement is satisfied in the instant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (3) is not attracted in the instant case. Since sub-section (2) or sub-section (3) are not applicable, sub-section (1) would apply. According to sub-section (1), where the income or any part thereof is not specifically receivable on behalf or for the benefit of any one person or where the individual shares of specified persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown, tax shall be charged on the relevant income at the maximum marginal rate. This provision applies to the 15 per cent. of the income which is credited to the charity account, since the shares are indeterminate or unknown and the individual shares of the beneficiaries are indeterminate or unknow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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