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TMI Blog1978 (10) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... v) of the I.T. Act as was applicable at the relevant time. Under the aforesaid first indenture of trust of July 11, 1955, the assessee settled equity shares of three limited companies of the face value of Rs. 1,25,000 besides cash amount of Rs. 30,000. The trustees were enjoined to pay initially a sum of Rs. 50 per month to the assessee's wife for maintenance, support and education of her daughter, Kumari Shashikala, till her marriage, and the balance of the income was to be utilised by paying to the wife of the assessee for the maintenance, support and education of their three minor sons, viz., Vijay, Rohit and Ashok. On the first son, Vijay, attaining majority, the trustees were enjoined to divide the corpus in three equal shares after retaining sufficient assets so as to yield an income of Rs. 50 per month which was to be utilised for the benefit of the aforesaid daughter, Shashikala. Vijay was to be handed over his 1/3rd share in the balance amount of the corpus. The income from the remaining two-thirds share of the corpus was to be paid to the wife of the assessee for maintenance and education of the two sons, Rohit and Ashok, and on their attaining majority the respective 1/3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ater. The income from the property " Ascharya Kunj " as well as from dividends of the settled shares was directed to be accumulated and added to the corpus till each of the sons attained majority. As soon as any son attained majority his 1/3rd share in the accumulated income was to be paid over to him and similarly the two other shares in the accumulated income were to be paid to each of the sons, Rohit and Ashok, as and when they attained majority. The cash amount of Rs. 20,000 was to be paid to the two major married daughters of the assessee at specified intervals. This is broadly the scheme of the two indentures of trust. The Tribunal has, in the statement of the case making the reference to this court, summed up the cumulative effect of these various clauses contained in the two indentures of trust, including the supplementary deed of trust by which the first indenture was amended, in the following terms : " ........ In short, therefore, as a result of the two instruments dt. 8-2-1962 the income of the two trusts was to be accumulated in the hands of the trustees to form part of the trust corpus, and that corpus was to be divided equally among the three sons as and when they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settlor under the provisions of section 64(v) of the I.T. Act ? " We must answer this question in favour of the assessee and against the revenue, that is, in the affirmative, obviously for the following reasons : We will read the material provision of s. 64(v) as was applicable at the relevant time : " 64. (1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly--...... (v) to any person or association of persons from assets transferred otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his or her spouse or minor child (not being a married daughter) or both." It should be recalled that the cumulative effect of the various clauses contained in the supplementary deed of trust of February 8, 1962, by which the first indenture of trust of July 1, 1955, was amended and also of those contained in the second indenture of trust of even date is that the income of the two trusts was to be accumulated in the hands of the trustees and that the accumulated income was to be divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax liability of the settlor, is sought to be avoided by providing that such income would be includible in the hands of the assessee-settlor provided the benefit from the income of such assets is either immediately available or is deferred for the spouse or minor children of the settlor. The legislature has, therefore, provided limitation in the relevant clause by prescribing that the benefit of income from such assets is either immediately available or is deferred after a certain time to the spouse or the minor children. If the child, for whom the benefit is provided, attains majority, it is clear that the provision contained in cl. (v) would not be attracted, on the plain reading of cl. (v) itself, because otherwise the Legislature would not have expressed itself in the manner in which it did by providing that income from such assets is for the immediate or deferred benefit of his or her spouse or minor child. It is, therefore, manifestly clear to say that the benefit cannot be deferred beyond the minority of the child who is sought to be benefited. There is also another aspect of the question which is arising in the present facts and circumstances of the case. Under the two i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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