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2005 (2) TMI 40 - MADRAS HIGH COURT"1. Whether, Tribunal was right in holding that the applicant-trust is a discretionary trust and, hence, maximum marginal rate of tax has to be applied? - 2. Whether Tribunal was right in holding that the rectification deed effected by the authority would not relate back and could not cure the alleged defect in the trust deed? 3. Whether Tribunal was justified in refusing to follow the general principle of law, viz., when the shares are not specified in the deed, the beneficiaries take the shares in equal proportion? - Tribunal has proceeded on the basis that the income was not actually received by the beneficiaries and it is open to the Revenue to make a direct assessment on the trust. – Accordingly, without expressing any opinion on the point raised by learned counsel for the assessee that since the Revenue has already exercised the option to tax the beneficiaries, it is not open to the Assessing Officer to assess the income of the trust in the hands of the trustee, we answer the questions of law referred to us in the affirmative, against the assessee and in favour of the Revenue, but with a direction to the Tribunal to consider the question afresh whether it is permissible for the Revenue to assess the income of the trust in the hands of the trustee and whether the Revenue has actually exercised the option while making the assessment on the beneficiaries
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