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TMI Blog1988 (2) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... t goings for the time being payable for the trust property and shall further pay all costs and expenses of and incidental to the management and improvement of the trust property, the expenditure to be so incurred being on such scale and at such time as the trustee shall in their discretion deem necessary. Cl. 3, which is material for the purpose of the present case, runs as follows: "That after payment of expenses, outgoing and payments as mentioned in cl. 2 of these presents out of the said rents, issues and profits of the said trust property the trustee shall divide the balance of such income in two parts and shall apply one part for the maintenance and education and upkeep of the sons of the said Babulal Shah, namely, (1) Krishna K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir sons. The AAC was further of the view that there was no stipulation that the distribution of income would vary depending on the number of sons of each of the beneficiaries. Keeping this aspect in view, it could not be said that the shares of the beneficiaries were indeterminate. The AAC was accordingly of the view that the ITO was not justified in treating the trust as a discretionary trust and in charging the tax at the maximum marginal rate. The ITO was accordingly directed to charge the tax at the normal rate. Aggrieved, the Department has come up in appeal before the Tribunal. 5. Shri S. Dasgupta, learned Departmental Representative, has submitted before us that in the Deed of Settlement sons of Babulal Shah and Purshottamdas Shah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le and their shares were also determinate and that cl. (ii) of Expln. I was not called into play in this case and, therefore, by taking recourse to this Explanation, it cannot be successfully argued that the shares of the beneficiaries shall be deemed to be indeterminate. 7. We have considered the rival submissions as also the facts on record. The assessee has filed a photostat copy of the Deed of Settlement dt. 7th Sept., 1954. Cl (3) of the Deed, which is relevant for the purpose of the present case, has already been reproduced above. Under the Deed, beneficiaries are the sons of Babulal Shah and Purshottamdas Shah, the two trustees and the sons of the settlor, namely, Smt. Jai Dei Debi Shah. The names of all the sons of the two truste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he shares of the beneficiaries are not specifically stated in the Deed of Settlement and, therefore, under cl. (ii) of Expln. I, shares of the beneficiaries shall be deemed to be indeterminate. So, the case falls within the mischief of cl. (ii) of Expln. I of s. 164. 9. Cl. (10) of the Deed cannot come to the rescue of the assessee. This clause provides that after the death of the two trustees, namely Babulal Shah and Purshottamdas Shah, the trust property shall devolve on their respective sons in equal shares. Sons of Babulal would collectively get half share and similarly sons of Purushottamdas Shah would get half share, but among themselves sons of Babulal Shah and Purshottamdas Shah, would get equally out of their respective half por ..... X X X X Extracts X X X X X X X X Extracts X X X X
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