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TMI Blog2017 (2) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... e maximum marginal rate in the status of AOP. Hence it is not relevant whether the necessary ingredients for formation of an AOP are fulfilled by the assessee or not?" 2. We may also record that the other questions are mainly dependent upon the answer to the above referred question and if the answer is in negative, then only the other questions may arise. Hence, we may refer to the said aspects at the later stage. 3. We have heard Mr. K.V.Aravind, learned Counsel appearing for the appellant-Revenue in all the appeals and Mr. Jehangir Mistri, learned Senior Counsel appearing with Ms. Vani H., learned Counsel appearing for the respondents-assessee. 4. In our considered view, all the detailed facts are not required to be narrated save and except that the Trusts were created on having the different name and style who are assesses in the respective appeals. As per the Trust Deeds, the benefits were shared amongst the beneficiaries and they were also separately assessed to tax under the Income Tax Act, (hereinafter referred to as 'the Act' for the sake of brevity). However, when the questions arose for assessment of the respective Trust, the Assessing Officer found that, as the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plat thereof is received shall be deemed to be indeterminate or unknown unless the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable, are expressly stated in the order of the Court or the instrument of trust or wakf deed, as the case may be, and are ascertainable as such on the date of such order, instrument or deed." 61. The general rule as laid down in Sec. 161(1) is that income received by a trustee on behalf of the beneficiary shall be assessed in the hands of the trustee as representative assessee and such assessment shall be made and the tax thereon shall be levied upon and be recovered from the representative assessee "in like manner and to the same extent as it would be leviable upon the recoverable from the person represented by him". To the above rule, however, three exceptions have been incorporated in the Act:- (a) Under s.161(1A), this rule of apportionment and determination of proportionate tax attributable to the beneficiary will not apply to any income earned by the trustee as profits and gains of a business. The whole of such income shall be taxed at the "maximum marginal rate". A similar proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribution Agreement. We are of the view that the above clause is sufficient to identify the beneficiaries. 65. On the aspect of ascertainment of share of the beneficiaries, we find that Article 6.5 of the Trust Deed clearly specifies the manner in which the income of the Assessee is to be distributed. The said clause details formula with respect to the share of each beneficiary. As rightly contended on behalf of the Assessee it is not the requirement of law that trust deed should actually prescribe the percentage share of the beneficiary in order for the trust to be determinate. It is enough if the shares are capable of being determined based on the provisions of the trust deed. In the case of the Assessee the trustee have no discretion to decide the share of each beneficiary and are bound by the provisions of the trust deed and is duty bound to follow the distribution mechanism specified in the trust deed. The further aspect that may require consideration in the present case is with regard to the clause in the Trust Deed which authorises addition of further contributors to the trust at different points of time in addition to initial contributors. From this clause can it be said th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the Trust Deed provides for shares of the beneficiaries which are determinable or non-determinable would vary from facts to facts of each Trust including that of the deed of trust etc. Such finding of fact can be arrived at after interpretation of the terms and conditions of the Trust Deed as well as the other facts and circumstances which may be germane to reach the conclusion on the finding of fact. If the matter is to rest on the question of finding of fact, in our view, such question of finding of fact would be outside the scope of judicial review in the present appeals which would be limited to substantial questions of law. 7. However, the learned Counsel appearing for the Revenue attempted to contend that such finding of fact so recorded by the Tribunal is perverse and therefore, it may fall under the judicial scrutiny in the present appeals. In his submission, what was required to be considered by the Tribunal was the exact amount of share by the beneficiaries and the quantification thereof and both should have been on the date when Trust Deed is executed or the Trust is formed. In his submission, if such conditions are not satisfied the shares of the beneficiaries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contrary, we do find that the view taken by the Tribunal is correct and would not call for interference so far as determinability of the shares of the beneficiaries are concerned. 12. Once the shares of the beneficiaries are found to be determinable, the income is to be taxed of that respective sharer or the beneficiaries in the hands of the beneficiary and not in the hands of the Trustees which has already been shown in the present case. 13. Under the circumstances, in any case, it cannot be said that the Tribunal has committed error. Accordingly, the question is answered in affirmative against the Revenue and in favour of the assessee. 14. If the assessment under Section 164(1) of the Act is not maintained in the hands of the Trustees, the other question raised by the Revenue, in our view, would not arise. The examination of such questions inspite of our answer to the above referred question would only be a mere academic exercise which Court would not undertake and Court would rather decide the questions which are really required to be decided. Hence, we find that the other questions which are raised in the appeals, as such, would not arise nor would be required to be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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