9911796707
TMI Blog2002 (9) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... law? 2. Whether, the Appellate Tribunal's view that the share of the beneficiaries are clearly known and determinate is reasonable, supported by valid material and sustainable in law? 3. Whether the Appellate Tribunal's view that the lottery prize money and 2/3rds of the income did not accrue to the trust/beneficiaries and could not be considered for assessment is reasonable, supported by valid materials and sustainable in law? 4. Whether the Appellate Tribunal's view that it is not possible to make an assessment in the status of association of persons/body of individuals is reasonable, supported by valid materials and sustainable in law?" One L. Narayana Iyer created a trust on May 27, 1982, by contributing a sum of Rs. 1,500 for the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m as a lottery prize under the U. P. State Lottery Scheme in January, 1983. The Income-tax Officer rejected the claim for refund and held that the entire amount received should be treated as income in the hands of the trustees who were to be taxed in the status of association of persons. On appeal, the Commissioner affirmed that view of the Income-tax Officer. The Commissioner also held that section 164 of the Act was not applicable to the facts of the case. The assessee, thereafter, appealed to the Tribunal which accepted the assessee's case. It set aside the assessment that had been made and directed that a fresh assessment be framed in accordance with law. Section 5 of the Act deals with the scope of the "total income" of residents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... represented by him." Section 41 of the Indian Income-tax Act, 1922, which is similar to section 160 of the Income-tax Act, 1961, was considered by the Bombay High Court in the case of CIT v. Balwantrai Jethalal Vaidya [1958] 34 ITR 187. Chagla C. J., speaking for the court, observed in that case thus: "Whether the assessee carries on business or is the owner of a property or owns shares and receives dividend, if he is a trustee and if he is being assessed as a trustee then section 41 must come into play and his liability to pay tax must be determined according to the provisions of section 41. The sole question, which should be easy to answer, would be: Is the assessment being made upon a trustee or not ? If the assessment is made upon a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied under any other provision of the Act." In the case of CIT v. Nandlal Agarwal [1966] 59 ITR 758 (SC), a case arising under the old Act, the Supreme Court, while considering the manner in which the guardian, who carries on business on behalf of minors and receives income on that behalf should be assessed, held that assessment on the guardian should be made only under section 40 of the 1922 Act. More recently, the apex court in the case of CIT v. Kamalini Khatau [1994] 209 ITR 101, a decision rendered by a three-judge Bench of the court, after reviewing the earlier decision of the court, as also the decision of the High Court in the case of Vaidya [1958] 34 ITR 187 (Bom), summarised the law with regard to the assessment of a represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er had not referred to sections 160 and 161 of the Act and, therefore, the assessment should be regarded as having been made with reference to the total income in the hands of the trustee irrespective of the amount being taxable in the hands of the beneficiary despite the fact that the shares of the beneficiary are determinate and their identities also known thereby excluding the application of section 164, cannot be accepted. The trustee is not to be assessed for all the income which the trustee receives where the beneficiaries are known and their shares are determinate. His liability cannot be higher than that of the beneficiary. It is only in cases where the beneficiaries are not known, or their shares are not determinate, that assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
