TMI Blog1979 (3) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act, 1961 would be applicable to the case of the assessee. He therefore charged the income returned by the assessee at the maximum rate of 65 per cent under s. 164 of the Act, in all the three years. 3. On appeal the AAC held, for the detailed reasons, discussed in the case of Mrs. Mahaveer Trust, that the action of the ITO in invoking the provisions of s. 164 was not correct. He therefore allowed the appeals for all the three years. The Department feels aggrieved by these orders of the AAC and has come up in appeal to the Tribunal. 4. Shri G.V. Jhabakh, for the Revenue, took us through the relevant provisions of the trust deed dt. 14th Dec., 1970, executed by Smt. Amra Bai, creating the trust in favour of the would-be wife of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted interest income from certain deposits and advances made by the trust out of the corpus of the trust to certain parties on interest. The trust in question was created under the deed of trust executed at Mannargudi by Smt. Amra Bai, wife of Shri Vijayalal Bafna on 14th Dec., 1970. She created this trust for the benefit and enjoyment of the would be wife of her grand son, Shri Ramesh by gifting a sum of Rs. 3,000 on the terms and conditions specified in the trust deed. The preamble of the trust-deed shows that Shri Ramesh is the minor son, aged of about four years, of Shri Askaran Bafna, who is the son of Smt. Amra Bai, who is the author of the trust. Clause 1 of the deed states that the trust was created for the benefit and enjoyment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed by her on 21st March, 1966, settling a sum of Rs. 25,000. The terms and conditions of the trust deed were similar to the terms and conditions contained in the trust deed in the present case. The Tribunal considered the matter elaborately and held as follows in paragraphs 4 to 7 of the order: "The ITO and the AAC has disallowed the claim of the assessee on the ground that it was not possible to fix the beneficiary under the trust. That the author of the trust has executed a valid deed of trust in fact duly registered setting apart a sum of Rs. 25,000 is not disputed. The clauses of the trust deed referred to above indicate that the primary object of the trust is to hand over the corpus with the accretion to the wife of Sri Uttamc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Uttamchand Chordia if he marries. Though at the moment the trust was created or even sometime later who the wife would be is not clear, the moment Uttamchand Chrodia marries the wife would be a definite person. In case the marriage does not take place, other contingencies have been provided for. The beneficiary, therefore, cannot be said to be indefinite at all. The mere fact that the particular person who would be the wife of Uttamchand Chordia is not ascertained at the time of the settlement does not make the beneficiary any the less certain. 13. On the question of reverting to the settlor also the Department's case does not seem to be correct. Income-tax is a tax on income and the income relevant is the income of the previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mely, Dec., 31, 1957, and, even if there was a possibility of any variation in the constitution of the family in future, such variation would be immaterial and would not affect the application of sub-s. (1) of s. 21." They repelled the argument of the learned Advocate General in that case that there was nothing in s. 21 which obliged with WTO to find out on every valuation date the beneficiaries and their shares in the trust properties. That the position to be seen is the valuation date for Wealth-tax and assessment year for income-tax would be clear also from other cases. In trustees of Putlibai R.F. Mulla Trust vs. CWT(6) it was held: "So far as the incidence of wealth-tax is concerned, it is the incidence on the `relevant date' that we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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