TMI Blog1994 (1) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... s) that the trust, L. P. Lahkar Family Trust, in which the assessee is a trustee, was a valid one and the income from the trust was not assessable in the hand of the trustee, in his individual capacity ?" R. A. No. 135/(Gau) of 1988: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in sustaining the order of the Commissioner of Income-tax (Appeals) that the issue was debatable and as such, action under section 154 was not called for?" R. A. No. 136/(Gau) of 1988 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Appellate Assistant Commissioner of Income-tax had correctly directed the Income-tax Officer to make the protective assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deed, i.e., to say, the beneficiaries were unborn children of the trustees which were uncertain and, therefore, the trust was void for uncertainty. On the basis of the aforesaid findings, the Income-tax Officer concluded that in the absence of the valid trust the income was assessable in the hands of the managing trustee. But since the assessee-trust had filed the return, the Income-tax Officer made the assessment as a protective measure for the assessment year 1979-80. So far the assessment of Shri Lakshmi Prasad Lahkar was concerned, the Income-tax Officer made the assessment in the status of individual in which amongst others, the income assessed as per order in the case of the assessee-family trust being share income from Kiron Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals). While disposing of the appeals, the Commissioner of Income-tax noted that the Income-tax Officer had considered clauses 4 and 5 of the trust deed. He had, however, overlooked clause 8 of the trust deed in which it was stated that the trustee would stand possessed of the trust estate in trust and on behalf of sons and daughter of Shri Lakshmi Prasad Lahkar for the time being in equal shares. The Commissioner of Income-tax (Appeals), under the aforesaid circumstances, held that the trust was a valid one and the income from the registered firm was not assessable in the hands of the assessee in his individual capacity and, accordingly, he deleted the addition. The Commissioner of Income-tax (Appeals) further held that the stand taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further held that the trustee stood possessed in respect of the settled property on behalf of the beneficiaries. In respect of the issue for which action was taken under section 154 of the Income-tax Act, the Appellate Tribunal agreed that the findings of the Commissioner of Income-tax (Appeals) and accordingly all the three appeals preferred by the Revenue were dismissed. Aggrieved by the order of the Tribunal, the Revenue sought and obtained a reference to this court on the three questions of law referred in paragraph 1 above. Of the three questions referred to this court for opinion, the first question itself, in our opinion, comprehends the third question and as such they are being discussed together while the second question is bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated above are present in the trust deed in hand. We further find that the intention of the testator as indicated in the trust deed cannot be said to be uncertain, inasmuch as, the trust deed gives the description of the person who is to be benefited. It is also well-established that the trust may be created in favour of an unborn person provided it satisfies the conditions laid down in section 13 of the Transfer of Property Act, even though the coming into existence of such a beneficiary is uncertain. We also cannot accept the submission of learned counsel appearing for the Revenue that the shares of the beneficiaries were indeterminate as per clause 4 of the trust, inasmuch as, clause 8 of the trust deed specifically determines the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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