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2003 (3) TMI 85

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..... , persons must come together with the object of earning profits. In the case of CIT v. Marsons Beneficiary Trust, it has been held by the Bombay High Court that the trustees who are authorised to carry on business under the trust deed derive their authority from the settlor and not from the beneficiaries and, therefore, the trustees cannot be considered as an association of persons or body of individuals. This judgment applies to the facts of our case. In the present case, therefore, the trustees cannot be assessed as an association of persons and consequently, section 45(4) will have no application. Accordingly, we set aside the impugned notice. - - - - - Dated:- 19-3-2003 - Judge(s) : S. H. KAPADIA., J. P. DEVADHAR. JUDGMENT The j .....

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..... ion is : whether section 45(4) is at all attracted. He contended that section 45(4) would apply only if profits arose from the transfer of a capital asset by way of distribution on the dissolution of a firm or an association of persons (AOP) or a body of individuals (BOI). That, in this case, the Assessing Officer has sought to reopen the assessment on the ground that the trustees constituted an association of persons as defined under section 2(31)(v). Mr. Mistry placed reliance on the judgment of the Bombay High Court in the case of CIT v. Marsons Beneficiary Trust [1991] 188 ITR 224. He also relied upon the judgment of the Bombay High Court in the case of Director of Income-tax (Exemption) v. Shardaben Bhagubhai Mafatlal Public Charitable .....

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..... er with the object of earning profits. In the case of CIT v. Marsons Beneficiary Trust [1991] 188 ITR 224, it has been held by the Bombay High Court that the trustees who are authorised to carry on business under the trust deed derive their authority from the settlor and not from the beneficiaries and, therefore, the trustees cannot be considered as an association of persons or body of individuals. This judgment applies to the facts of our case. In the present case, therefore, the trustees cannot be assessed as an association of persons and consequently, section 45(4) will have no application. Accordingly, we set aside the impugned notice. Conclusion: Rule is made absolute in terms of prayer clauses (a) and (b). No order as to costs. - .....

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