2002 (11) TMI 54

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..... e of income of the private family trust cannot be taken into account for rate purposes under section 86(v) of the Income-tax Act?" The assessee is an individual and the assessment year involved is 185-86 for which the relevant previous year ended on March 31, 1985. The assessee, inter alia, received a sum of Rs. 30,013 being his share of income of a trust called "Bajaj Family Trust". The assessee is one of the beneficiaries of the said trust. It is admitted by learned senior counsel for the Revenue that the entire income of the trust including a sum of Rs. 30,013 was assessed in the hands of the representative assessee, namely, the trustee. The Assessing Officer for the assessment of the assessee-individual has included the amount received .....

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..... the beneficiary. There is no dispute that the trustees were assessed in terms of the provisions under section 161(1A) of the Act read with section 164 of the Act and the tax was levied at the maximum marginal rate. Section 86 of the Income-tax Act lies under Chapter VII and that Chapter deals with the procedure for assessment of share of a member of an association of persons or body of individuals in the income of the association or body. During the relevant assessment year in question, there is no doubt that if the assessee was a member of an association of persons or body of individuals, his share shall be taken into account for rate purposes. Under the proviso to clause (v) of section 86 where the association or body of individuals is c .....

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..... ble to be included as the income of the assessee it is not necessary to consider that aspect. Section 86(v) clearly excludes the same even for rate purposes. Further section 5 is also subject to other provisions of the Act, including sections 66 and 86 of the Act. Therefore, we do not find any reason to interfere with the order of the Income-tax Appellate Tribunal holding that the share of the benefit received by the assessee from the trust is not liable to be taken into account for rate purposes. Consequently, the question of law referred to us is answered in the affirmative, in favour of the assessee and against the Revenue. However, in these circumstances, there will be no order as to costs.
Case laws, Decisions, Judgements, Orders .....

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