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2014 (8) TMI 601 - HC - Income TaxRate of tax on allocation of income of Trust to beneficiaries - Maximum marginal rate u/s 164 – Specific Trust or Discretionary Trust – Held that:- With respect to the AY 1982-83 and 1983-84, Commissioner took a view that the assessee Trust was subjected to income allotted to Schedule-II to tax at the maximum marginal rate in the hands of the Trustees is the beneficiaries’ income receivable by the beneficiaries to the extent of 50% after 19 years - the shares which are allotted to the respective beneficiaries even with respect to Schedule-I and Schedule-II are specific shares and it can be said to be determinative shares - Merely because 50% of the income and their respective shares were to be accumulated as a special fund in the hands of the trustees for 19 years and the same were to be paid after a period of 19 years, it cannot be said that the Trust is discretionary Trust and/or the Trust is not a specific Trust - the assessee Trust is a specific Trust and therefore, not subjected to the tax at the maximum marginal rate u/s 164 of the Income Tax Act, 1961- Decided in favour of Assessee.
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