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TMI Blog1989 (3) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... n detail for the assessment year 1974-75 and for the other years he has followed that order. 3. The settlor settled upon trust certain properties for the benefit of her daughter-in-law and the children. Under clauses 6 and 7 of the trust deed the trustees were empowered to distribute the net income equally between the beneficiaries. There are other details regarding the distribution of this income, providing for various possibilities but they are not material for our purpose. Under clause 16 of that deed the trustees were to distribute the corpus of the trust according to the shares for distribution of the income. The date of distribution of the corpus was the date on which the child which would be born after the date of the trust deed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted this contention on the ground that the daughter-in-law could not be said to be mainly dependent upon the mother-in-law and the grandchildren could not be assumed to be mainly dependent on the grandmother unless cogent evidence was produced. Since the assessee had failed to produce that evidence he held that the said provision was not applicable. 5. Before the Commissioner it was contended that under clause 15 the trustees were empowered only to give the properties and not to distribute, which meant that the trustees merely had power to advance temporary loans for reasons stated in that clause. The Commissioner has rejected the assessee's contention and confirmed the order of the WTO on these points. 6. Before us the assessee's coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tees and the beneficiaries understood clause 15 to mean that the trustees had the power only to give a loan and not to give away any part of the corpus to the beneficiaries. In this situation the fact remains that under clause 15 the trustees did have power to give away part of the corpus to any of the beneficiaries as they considered proper. The question, therefore, before us is whether this particular clause would mean that the shares of the beneficiaries were indeterminate or unknown. The assessee's counsel submitted that even after part of the property was given away the shares were determinate on the valuation date. He also pointed out that regarding income it had been held that the trust was a specific trust. On the other hand, the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this issue because it was after the passing of the assessment order. The assessee could very well have done that in order to strengthen its case that the said clause 15 gave power only to advance a loan. Moreover, as stated above, the said clause 15 does not provide that the trustees have power only to give a loan. The translation put forward by the assessee is incorrect and in fact it is surprising that such a translation should have been put forward. Both the act of putting forward this kind of translation as well as the above attempt to support that interpretation by making a recovery from the beneficiary subsequent to the passing of the assessment order do not do any credit to the assessee. 9. However, we have to consider this questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be said that the shares of the beneficiaries are indeterminate or unknown by reason of clause 15. 10. The learned DR had pointed out that under clause 23 of the trust deed the trustees had power to make investments. He submitted that the loan to a beneficiary was an investment. Therefore, according to him, irrespective of clause 15 the trustees had such a power. We do not agree with him. This is a very usual clause in trust deeds to enable the trustees to administer the trust property in a manner most beneficial to the beneficiaries. It does not make the shares indeterminate. Therefore, we hold that the trusts cannot be assessed under sec. 21(4) but have to be assessed under sec. 21(1). The AAC's order is set aside and the WTO is dire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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