9911796707
TMI Blog2008 (9) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1956 (for short 'Act') for A.Y. 1981 - 82 in all the reference applications filed by the revenue, which gave rise to the present Income-tax references. Since identical question is involved in all the Income-tax references, for the sake of convenience, the question is reproduced from I.T.R. No. 01 of 1998 and facts are also taken from the said reference. The question is as under :- Whether the Appellate Tribunal is right in law and on facts in holding that share income of the assessee as a beneficiary from M/s. Bharat Trust / Navbharat Trust, Norma Trust should be assessed on substantive basis ? 2. The respondent in all these references are beneficiaries of main Trust, namely, M/s. Bharat Trust and M/s. Navbharat Trust. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the Trust has to be computed and apportioned in terms of the provisions of Section 161 (1) of the Income-tax Act, 1961 and their income cannot be subjected or brought to tax at the maximum marginal rate under Section 164 (1) of the Act. It has, therefore, been contended on behalf of the assessee that the income of the main Trust having been allocated amongst the beneficiaries as per Section 161 (1) of the Act, income received in the hands of the beneficiaries deserve to be assessed on substantive basis. In this view of the matter, the Tribunal upheld the order of the first Appellate Authority in the cases of the beneficiaries involved. 5. Since the reference has been made in the cases of the main Trust i.e. Bharat Trust and N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the beneficiary. However, another Division Bench of this Court wherein one of us (K. A. Puj, J.) was a party did not agree with the view taken by the earlier Division Bench and admitted Special Civil Application No. 7110 of 2002 with Special Civil Application No.7244 to 7257 of 2002 on 14.08.2002 and passed an order that having regard to the order dated 30.07.2001 passed by another Division Bench of this Court in Tax Appeal Nos.188 to 228 of 2001, with which the subsequent Division Bench was not inclined to agree, the petitions were ordered to be listed before a larger Bench after obtaining appropriate orders of the Hon'ble Chief Justice. 8. Pursuant to the said order, Full Bench was constituted and vide its order dated 17.09.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested therein. 11. Being aggrieved by the said order of the Tribunal, the revenue has filed Tax Appeals before this Court and all the tax appeals were disposed of by this Court on 26.06.2008. From amongst these tax appeals, the assessees of the present references are also covered. A detailed chart showing the name of the assessee, assessment year, ITR number, name of the main Trust and corresponding Tax Appeal number is furnished during the course of hearing of these references. The same is as under :- Sr. No. Name Asst. Year ITR No. Name of Main Trust High Court Tax Appeal No. 01. Santokben Kanjibhai Patel 81-82 1 of 1998 Navbharat Trust 1659 of 2006 02. Khodidas Vandas Pateel OSDFT 81-82 2 of 1998 Bharat Trust 1757 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the main Trust. The orders passed by the first Appellate Authority and the Tribunal directing to assess the income in the hands of the beneficiaries on substantive basis is just and proper. By taking advantage under KVSS and by paying the tax at a lesser amount, the group as a whole has taken the refund of Crores of Rupees which cannot be permitted in law. Submission is, therefore, made that the reference may be decided accordingly. 14. A contention is also urged before the Court that if this Court cannot take a contrary view than the view taken by the earlier Bench, the matter may be referred to the larger Bench. 15. Once we have thought to accept this alternative contention of the revenue and to refer the matter to the larger Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X
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