TMI Blog1980 (4) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Chandrashekhar Bhalchandra Raghoji 4. Manjusha Bhalchandra Raghoji 5. Anupama Bhalchandra Raghoji 3. Clause 2 deals with distribution of net income or profit amongst the beneficiaries. cl. No. 2 mentions that the trustees have absolute power to accumulate the whole of the said income or such part thereof and to invest. The accumulation so made shall be treated for all purposes as 'Corpus' or capital to be distributed at the expiration of the said period of 18 years. Cl. No. 3 is regarding the distribution of income or asset. The distribution of income or asset will be made after 2 years but prior to expiry of 18 years. The effect of the clauses in nutshe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the trustees, the object of the trust was defeated as the beneficiaries will not be entitled to the discretion of the trust for the first two years in distribution and enjoyment of the shares. He further held that trust which was created by Smt. Sulochana Bhimashankar Raghoji could not be said to be having shares which were determinate and receivable by them definitely and fully. The ITO accordingly held that the trust was discretionary one and liable to tax at 65 per cent. Similar order was passed by him for the subsequent year i.e., 1976-77. 5. Against the order of the ITO, assessee went in appeal before the AAC. The AAC in para 3 of his order observed "It is an admitted position that the cls. 2 and 3 relied upon by the ITO in comi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndeterminate and according to him the answer was in the affirmative. Reliance was placed on B. P. Mahalaxmiwala vs. CIT Bombay City (1954) 26 ITR 177 (Bom) at page 183 and 185 CIT, Bombay City vs. Lady Ratanbai Mathuradas Ors. (1968 67 ITR 504 (Bom) at page 511 and 513 and CIT, Gujarat vs. Smt. kamalini Khatau (1978) 112 ITR 652 (Guj) (FB). According to Shri Kothari accumulation would be distributable to others, the settler being excluded, there is indeterminate beneficiary. Shri Kothari pointed out that there is a very small difference in the present case and the case reported at (1968) 67 ITR 504 (Bom) but the ratio of the judgment can be made applicable to the facts of the case. It was urged that no emergency is shown in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible between the beneficiaries in the following manner. 1. Gundappan Bhalchandra Raghoji 1/5 2. Arvind Bhalchandra Raghoji 1/5 3. Chandrashekhar Bhalchandra Raghoji 1/5 4. Manjusha Bhalchandra Raghoji 1/5 5. Anupama Bhalchandra Raghoji 1/5 . Total 1 According to Shri Patil this clause lay down that division takes place of income and i.e., 1/5 share goes to the beneficiary. According to Shri Patil it is a specific share and also beneficiary is there. Therefore, it cannot be said that the beneficiary is unknown of the share is indeterminate. Shri Patil drew our attention to the Tribunal s earlier order and st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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