TMI Blog1980 (4) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in clause 2(L)(iv) of the trust deed and it is, therefore, set out in full: " So long as any one or more of the members of the family of the settlor and the dependants of the settlor whose names are mentioned in the Fourth Schedule hereunder written who are at present residing in Nazri Bagh, and Eden Garden and Gough's Bungalow continue to reside there during the continuance of this trust, the trustees shall set apart every year out of the income of the trust fund such sum as they deem fit not exceeding Rs. 1,50,000 (Rupees one lakh and fifty thousand) in any one year to maintain the palace kitchen with the necessary staff for the purpose of supplying the daily food as is being done at present to the members of the family of the sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c purpose of meeting expenses of such person's daily food. During the lifetime of the settlor, the palace kitchen was run and maintained by the trustees in the premises of the King Kothi palace and food was supplied to the beneficiaries in accordance with the aforesaid directions by the trustees. But, subsequent to the death of the settlor on February 24, 1967, the trustees had found it impracticable to run the palace kitchen. Out of the 71 beneficiaries mentioned in Schedule IV, five had pre-deceased the settlor. One of the beneficiaries died subsequent to the date of the settlor's death and 26 of the beneficiaries had ceased to reside in any one of the aforesaid three palaces for reasons other than marriage. In those circumstances, the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke a payment to the beneficiaries. The Appellate Assistant Commissioner also reasoned that the interest of the beneficiaries is an undefined interest and that the share of each beneficiary is indeterminable and unknown and that, therefore, the beneficiaries could have no vested right to get income in any definite share from the income of the trust fund. In that view, the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer. The trustees preferred an appeal to the Income-tax Appellate Tribunal, which had reversed the orders of the Income-tax Officer as well as of the Appellate Assistant Commissioner, holding that the meaning of the direction contained in clause 2(1)(iv) of the trust deed was to direct the trustees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and more particularly section 160(1)(iv) of the Act that the trustees in this case shall be treated as representative assessees as they receive or are entitled to receive income from the trust executed by the late Nizam on behalf of or for the benefit of the beneficiaries mentioned in Schedule IV to the trust deed. Under section 161, sub-section (1), a representative assessee shall be liable for assessment in his own name in respect of that income in his representative capacity only and tax should be levied upon and recovered from the representative assessee to the same extent as it would be leviable upon and recoverable from the person represented by him. The only question, therefore, which can be seriously argued is whether the benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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