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TMI Blog2024 (8) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the person represented by it i.e., RIIHL which was taxed u/s 115BAA. As in the case of Mrs. Amy F. Cama [ 1998 (6) TMI 60 - BOMBAY HIGH COURT] assessee claimed purchase price of the flat should be deducted from the capital gain arising out of the sale of the said immovable property, under section 54. ITO negatived the assessees claim on the ground that the trust who was the owner was not residing in the said flat and the beneficiaries who resided therein were not the owners and, therefore, the assessee did not fulfil the conditions laid down in section 54. On appeal, the AAC also negatives the claim of the assessee. On second appeal, the Tribunal, dismissed of assessee s claim on the ground that the excess amount realised by the trustee would be income in her hands and the said income could not be said to be income receivable on behalf of the beneficiary. Tribunal came to the conclusion that the question of applicability of section 161 did not arise in the instant case. Decided in favour of assessee. - SHRI NARENDRA KUMAR BILLAIYA, HON BLE ACCOUNTANT MEMBER SHRI RAJ KUMAR CHAUHAN, HON BLE JUDICIAL MEMBER For the Appellant : Shri Madhur Agarwal Shri Nimesh Vora, A/Rs For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and settler and as RIIHL has opted to be taxed under the new tax regime @22% being a representative assessee u/s 161 of the Act, the assessee is also liable to be taxed at the same rate i.e., @22% + applicable surcharge and CESS. Before us, the ld. D/R strongly supported the findings of the CPC and vehemently contended that the assessee is not a representative assessee within the meaning of Section 161 of the Act and, therefore, cannot take the benefit of lower rate of tax. Per contra, the ld. Counsel for the assessee reiterated what has been stated before the lower authorities. 5. We have carefully perused the orders of the authorities below. Representative assessee has been considered u/s 160 of the Act and the same reads as under:- Representative assessee. 160. (1) For the purposes of this Act, representative assessee means (i) in respect of the income of a non-resident specified in [***] sub-section (1) of section 9, the agent of the non-resident, including a person who is treated as an agent under section 163; (ii) in respect of the income of a minor, lunatic or idiot, the guardian or manager who is entitled to receive or is in receipt of such income on behalf of such minor, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t declared by any person by will exclusively for the benefit of any relative dependent on him for support and maintenance, and such trust is the only trust so declared by him. 26 [***] (2) Where any person is, in respect of any income, assessable under this Chapter in the capacity of a representative assessee, he shall not, in respect of that income, be assessed under any other provision of this Act. [emphasis supplied] 7. Sub-Section (1) is the relevant sub-Section. It can be seen that the tax shall be levied upon and recovered from 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 which means that the trust will be subject to same rate of tax as applicable to the person represented by it i.e., RIIHL which was taxed u/s 115BAA of the Act. 8. At this stage it would be pertinent to refer to the decision of the Hon ble Jurisdictional High Court of Bombay in the case of Mrs. Amy F. Cama vs. CIT reported in [1999] 237 ITR 82 (Bombay), wherein the Hon ble High Court considered the following facts:- FACTS The assessee was the sole trustee and beneficiary of the testamentary trust created by her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be levied upon and recovered from the trustee in the like manner and to the same extend as it would be leviable upon and recoverable from the person represented by the trustee. This provision would apply in the case of a trustee who receives or is entitled to receive income for the benefit of any person. Where income in respect of which the trustee is liable as a representative assessee 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, tax has to be charged as if that income was the total income of an AOP Section 164 is an enabling section similar to section 161(1) and nothing more or less could be read therein. In the cases covered by section 161(1) an option could be exercised on the strength of the trust deed itself since the income in such cases is receivable by the trustee on behalf of or for the benefit of a single beneficiary or where there are more beneficiaries than one, the individual shares of the beneficiaries are determinate and known. The Act did not intend to levy tax except in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving life interest was residing in the property which was sold and used the newly acquired flat for residence. Similarly, the other beneficiaries, i.e., children of the testator were residing in the property which was sold and resided in a flat which was acquired. Thus, the beneficiaries were using the property for their residence and continued to reside in the new flat which was acquired. In law, the trustee, i.e., the assessee, must be assessed for and on behalf of the beneficiaries, In view of the said legal position. The AAC was not right in holding that the trust which was the owner of the property was not residing in the said property and the beneficiaries were residing in the said property not as the owner, therefore, section 54 was not attracted. In law, the beneficiaries are the real owners and the trustee holds the properties for and on behalf of the beneficiaries. The trustee has to be assessed under the Act as a representative assessee for and on behalf of the beneficiaries and tax can be levied and recovered from the trustee in the like manner and to the same extent as it would be leviable upon and recoverable from the person represented by the trustee. In the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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