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TMI Blog2016 (8) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified in applying Explanation 1(ii) to section 164 for holding that the Trust is assessable at maximum rate?". 2. The above question arises from the facts as set out in the statement of case as under: "(a) Dr. G. S. Mirje settled a sum of Rs. 1,000/on trust on or about 2.8.1976 and reduced the terms of settlement to writing (Annexure A). In terms of the mandate given by the Settler, the Trustees carried on business in the name and style of Mirje Enterprise, Kolhapur with a branch at Belgaum. The business in purchase and sale of scooters and spareparts. A return income was filed on 28.6.1980 showing income of Rs. 1,52,300/along with a contention that no demand is payable as shares the beneficiaries are specific. The ITO accepted thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd August, 1976. It has been assessed as a specific Trust. This is so as the shares of the beneficiaries were determinate and tax was levied in the hands of the beneficiaries for Assessment Years 1978-79 and 1979-80. The aforesaid Trust Deed was modified by the Rectification Deed dated 21st October, 1979. By this Rectification Deed, the power given to the Trustees in the Trust Deed dated 2nd August, 1976 to the effect that in its absolute discretion, the trustees by Resolution, can decide the shares of the beneficiaries in the Trust, was withdrawn. On the basis of the Rectification Deed, it is contended by the Revenue and so held by the Tribunal that on the date of execution of the Trust Deed, it was not a specific trust but a discretionary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 166 of the Act in an Appeal arising in the same contextual facts as in this Assessment Year. Further, it is very fairly pointed out the appeals by the Revenue from the order dated 21st February, 2009 of the Tribunal were dismissed albiet on account of low tax effect. 5. Thereafter, Mr. Pardiwalla, learned Sr. Counsel invited our attention to the decision of the Apex Court in Jyotendrasinhji (supra) - wherein it has been held that the trustees of a trust are treated as a representative Assessee by Section 160(1) of the Act. Further, in case of discretionary trust, the trustees are liable to be taxed in respect of income received by trust at the rate specified in Section 164(1) of the Act, which is at the highest marginal rate. Neve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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