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TMI Blog2021 (8) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that assessee was liable to distribute such income to its beneficiaries which was claimed as expense by the assessee. As noticed that same group of beneficiaries comprising of five members have also not claimed their share of income on account of similar dispute with the assessee trust as was in the earlier assessment year 2013-14 and 2015-16. The Co-ordinate Bench held that revenue cannot pick and choose certain amounts representing the share of the beneficiaries and tax in the hands of the assessee and simultaneously not charging the tax in the hands of the assessee with respect to majority of the beneficiaries. The facts of the case and issue involved in the present appeal are identical to the assessment year 2013-14 and 2015-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries. During the year, the assessee trust earned interest out of its saving bank deposits and fixed deposits of ₹ 6,81,000/- and ₹ 1,27,18,381/- and same was distributed among the beneficiaries. The Assessing Officer has noticed on making verification u/s. 133(6) that five beneficiaries have refused to receive the share out of the aforesaid income from the trust. The detail of such income shown by the assessee trust as distributed to the five beneficiaries were namely Bharat P. Raut ₹ 6,25,700/-, Bharat Raut HUF ₹ 2,08,122/-, Vidya R. Raut ₹ 3,78,889/-, Manas Raut ₹ 11,76,103/- and Ms. J.P. Raut ₹ 1,65,430/-. The Assessing Officer has held that since the above five beneficiaries have not disclosed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the trust in fact is only escrow mechanism in the form of specific trust created for the purposes. It is also submitted that assessee was liable to distribute such income to its beneficiaries which was claimed as expense by the assessee. With the assistance of the ld. representatives, we have gone through the decision of Co-ordinate Bench of the ITAT in the case of the assessee itself pertaining to Assessment year 2013-14 and 2015-16 vide ITA Nos. ITA Nos. 1348/Ahd/2017 553/Ahd/2018 dated 02-06-2020. The relevant part of the decision is reproduced as under:- 13. We have heard the rival contentions of both the parties and perused the materials available on record. The facts of the case are not in dispute which has been elab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share of the beneficiary's and tax in the hands of the trust and simultaneously not charging the tax in the hands of the trust with respect of majority of the beneficiaries as discussed above. 16. The provisions of section 160(1)(iv) provides that the trustees of the trust having valid instrument shall be chargeable to tax in the capacity of representative assessee. 17. The provisions of section 164(1) further provides that the income of the trust shall chargeable to tax at the maximum marginal rate in a case where shares of the beneficiaries are indeterminate or unknown. Conversely, if the shares of the beneficiaries are determinate or known then the maximum marginal rate will not be applicable. Thus it is transpired that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 160 lays down the meaning of representative assessee who shall be deemed to be an assessee for the purposes of the IT Act. Section 160(1)(iv) states that trustee(s) appointed under a trust will be treated as representative assessee, in respect of income received or income which the trustee is entitled to receive on behalf of any of the beneficiaries under a trust. 5.4 Further, section 161 read with section 160(1)(iv) of the IT Act, a trustee of a trust is treated as a representative assessee, and the representative assessee is liable to pay tax on the income in respect of which he is a representative assessee, in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of appeal of the assessee is allowed. It is noticed that same group of beneficiaries comprising of five members have also not claimed their share of income on account of similar dispute with the assessee trust as was in the earlier assessment year 2013-14 and 2015-16. The Co-ordinate Bench held that revenue cannot pick and choose certain amounts representing the share of the beneficiaries and tax in the hands of the assessee and simultaneously not charging the tax in the hands of the assessee with respect to majority of the beneficiaries. The facts of the case and issue involved in the present appeal are identical to the assessment year 2013-14 and 2015-16, therefore, respectfully following the decision of the Co-ordinate Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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