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2003 (3) TMI 85 - BOMBAY HIGH COURTOn the facts, it may be mentioned that the trust in the present case, is a fixed trust and not a discretionary trust and, therefore, section 164(1), relied upon by the Department, has no application. Secondly, in this case, section 164 has no application. That section only makes the trustees assessable, which is not the issue before the court. The only issue which arises for determination is : whether section 45(4) applies to the facts of this case. That section would apply only if the trustees constitute an association of persons. Basically, in order to constitute an association of persons, 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.
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