TMI Blog2017 (2) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... ay in other words, in proportion to the investment made. Once the benefits are to be shared by the beneficiaries in proportion to the investment made, any person with reasonable prudence would reach to the conclusion that the shares are determinable. Once the shares are determinable amongst the beneficiaries, it would meet with the requirement of the law, to come out from the applicability of Section 164 of the Act. Under the circumstances, we cannot accept the contention of the Revenue that the shares were non-determinable or the view taken by the Tribunal is perverse. On 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. 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. - Decided in favour of the assessee. - ITA NO.191/2015 C/W ITA NOS.446/2015, 447/2015, 448/2015, 449/2015 & 450/2015 - - - Dated:- 1-2-2017 - MR. JAYANT PATEL AND MR. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were further carried before the Tribunal by the Revenue, the Tribunal by the impugned order in ITA No.191/2015 at paragraphs-60 to 65 observed thus: 60. The Issues raised by the Revenue in Grounds 4 to 7 of the grounds of appeal is with regard to applicability of provisions of Sec.164(1) of the Act. In view of the conclusion on Ground No.3 the adjudication of other grounds may not be necessary. Since the order of the AO is based on the applicability of the provisions of Sec.164(1) of the Act, we deem it appropriate to adjudicate on the issues raised in ground No.4 to 7 as well. The provisions of Sec. 164(1) of the Act and Expln.-1 to Sec.164 are relevant in this regard. Sec.164(1) lays down that where any income or any part thereof in respect of which the persons mentioned in cl.(iv) of sub-section(1) of Section 160 is liable as representative assesee or any part thereof (i) is not specifically receivable on behalf or for the benefit of any one person; or (ii) where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown (such income, such part of the income and such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (c) In certain other circumstances, set out in the proviso to s.164(1), the relevant income will be assessable not at the maximum rate but at the rate applicable to it as if it were the total income of an AOP. 62. In the present case the AO has not invoked the provisions of Sec.161(1A) of the Act or the proviso to Sec.164(1) of the Act and therefore, we need not examine those provisions. As far as identification of individual shares of the Sec.164(1) of the Act will not get attracted for the reason that the beneficiaries are not identifiable. 63. The question for our consideration therefore is regarding applicability of Sec.164(1) of the Act. There are two aspects to be noticed in the above provisions. The first aspect is the identification of the beneficiaries. The second aspect is with regard to ascertainment of the share of the beneficiaries. 64. On the aspect of identification of the beneficiaries, it is the plea of the learned counsel for the Assessee that so long as the trust deed gives the details of the beneficiaries and the description of the person who is to be benefited, the beneficiaries cannot be said to be uncertain. CBDT Circular No.281 dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssly the manner in which the beneficiaries are to be ascertained and also the share to which each of them would be entitled without ambiguity, then it cannot be said that the Trust deed does not name the beneficiaries or that their shares are indeterminate. The persons as well as the shares must be capable of being definitely pin-pointed and ascertained on the date of the trust deed itself without leaving these to be decided upon at a future date by a person other than the author either at his discretion or in a manner not envisaged in the trust deed. Even if the Trust deed authorises addition of further contributors to the trust at different points of time, in addition to initial contributors, than the same would not make the beneficiaries unknown or their share indeterminate. Even if the scheme of computation of income of beneficiaries is complicated, it is not possible to say that the share income of the beneficiaries cannot be determined or known from the trust deed. In view of the aforesaid decision of the AAR, with which we respectfully agree, we hold that the provisions of Sec.164(1) of the Act would not be attracted in the present case. We also find that the Hon'ble Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by record and is on some hypothesis or surmises. The second test is, that the finding arrived at which any person with reasonable prudence may not record. Then it can be said that such finding is perverse. 9. Examining the matter in the present case it appears that it is not the case of the Revenue that the findings so recorded is such, which no man with reasonable prudence would arrive at such finding. But the contention sought to be canvassed is that on the date of execution of the Trust Deed, the shares should specifically come in existence with the quantification and it need not depend upon the future share of the benefits or upon any future contingency. 10. In our view, the contention is wholly misconceived for three reasons. One is that by no interpretative process the explanation to Section 164 of the Act, which is pressed in service can be read for determinability of the shares of the beneficiary with the quantum on the date when the Trust deed is executed and the second reason is that the real test is the determinability of the shares of the beneficiary and is not dependent upon the date on which the trust deed was executed if one is to connect the same with the ..... 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