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TMI Blog2020 (10) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2009-10. 2.The appeal has been filed raising the following substantial questions of law:- "1. Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the assessee as a discretionary trust ignoring the fact that the beneficiaries and their share of interest in the trust are determinable at all points of time? 2.Whether on the facts and circumstances of the case and law the Tribunal was right in law in holding that the provisions of Section 160 is not applicable and the assessee is liable to be taxed on the entire income? 3.Whether on the facts and circumstances of the case and law the Tribunal was right in law in holding that the entire receipt is taxable in the hands of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eads as follows:- "18.The broad issues which would fall for consideration are whether the assessee Trust is a determinate Trust or indeterminate Trust. The Assessing Officer came to the conclusion that it is an indeterminate Trust, as the list of beneficiaries has not been specifically set out in the Deed of Trust. The other issue would be whether if in case, the beneficiaries are assessed for the income arising from the Trust and whether it is determinate or indeterminate can the trust be assessed once over again. The third issue would be whether merely because the names of the beneficiaries are not mentioned in the Trust Deed, but shown as beneficiaries and are identifiable and having been assessed whether the Trust can be assessed ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 913) receives or is entitled to receive on behalf of or for the benefit of any person such trustee or trustees will be representative assessee. Section 161 provides for the extent of the liability of the representative assessee to the effect that every representative assessee as regards the income in respect of which he is a representative assessee, shall be subject to the same duties, responsibilities and liabilities as if the income received by or accruing to or in favour of him beneficially, and shall be liable to assessment in his own name in respect of that income; but any such assessment shall be deemed to be made upon him in his representative capacity only, and the tax shall, subject to the other provisions contained in Chapter XV, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of that Section itself, viz., Charge of tax where the share of the beneficiaries unknown. That Section comes into play only where any income or any part thereof is not specifically receivable on behalf of 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, and in such case, the relevant income, or part of the relevant income shall be charged at the maximum marginal rate. 18. From this, it is clear that in order to attract Section 164(1) of the Act, the beneficiaries on whose benefit, such income or such part thereof is receivable are indeterminate and unknown." 19.The legal position qua the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantum on the date when the Trust deed is executed and the second reason is that the real test is the determinability of the shares of the beneficiary and is not dependent upon the date on which the trust deed was executed if one is to connect the same with the quantum. The real test is whether shares are determinable even when even or after the Trust is formed or may be in future when the Trust is in existence. In the facts of the present case, even the assessing authority found that the beneficiaries are to share the benefit as per their investment made or to say in other words, in proportion to the investment made. Once the benefits are to be shared by the beneficiaries in proportion to the investment made, any person with reasonable pru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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