TMI Blog1980 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... rst Schedule to the Finance (No. 2) Act, 1971, and corresponding provisions in the Finance Acts of 1972 and 1973 ? (2) Whether on the facts and in the circumstances of the case, the income of the trust could be charged to tax at the rate of 65% as provided under section 16 of the Income-tax Ace, 1961 ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the supplementary deed of declaration dated March 14, 1971, is void and ineffective ? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the shares of the beneficiaries are indeterminate and unknown?" The material facts giving rise to this; reference as set out in the statement of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capacity of trustees for the purposes mentioned in the preamble, clause No. 2 of the deed. In cl. 17 of the deed it is stated that the object of the trust shall be deemed to have been finally fulfilled when the obligations in relation to the last issue of Smt. Sumitra Devi were fully satisfied on his or her attaining the age of 21 years. Clause 16 laid down that the trustees shall hand over the balance of the trust money in their hands to Smt. Sumitra Devi Ganediwal when the objects of the trust were finally fulfilled. In the supplementary deed of trust a change was introduced to the effect that Shri Piarelal Sakseria at the time of making the gift had expressed that the amount was for meeting the obligations as a material grandfather in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid questions of law for the opinion of this court. Before considering the contentions raised by the learned counsel for the parties it is useful to reproduce the relevant provisions of s. 164 of the Act. Section 164(1), as amended by the Finance Act, 1970, is as follows" " 164. (1) Subject to the provisions of sub-sections (2) and (3) where any income in respect of which the persons mentioned in clauses (iii) and (iv) of sub-section (1) of section 160 are liable as representative assessees or any part thereof is not specifically receivable on behalf or for the benefit of any one person or where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the trustees it was provided in the deed that the approval of Piarelal, the donor of the gift, to the terms of this trust deed be obtained and recorded. It is apparent from this deed of trust that Shri Piarelal Sakseria made a gift of a sum of Rs. 20,000 for providing the means for meeting his obligations as the maternal grandfather in relation to the issues of Smt. Sumitra Devi. It was further provided in the deed that the object of the trust should be deemed to have been finally fulfilled when the obligations relating to the last issue of Sumitra Devi were fully satisfied on his or her attaining the age of 21 years. If the gift of Rs. 20,000 by the donor, Shri Piarelal Sakseria, was for the benefit of all the issues of Smt. Sumitra De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom tax and, therefore, it could not be taxed under the provisions of s. 164 of the Act. The contention of the learned counsel for the assessee cannot be upheld. If the provisions of s. 164 of the Act are attracted power is given to the ITO to charge the tax as if the relevant income or part of the relevant income were the total income of an association of persons or at the rate of sixty-five per cent., whichever course would be move beneficial to the revenue. As in the present case it was beneficial to the revenue to charge the tax at the rate of 65%, it has been so charged and it cannot be said that any error of law has been committed by the taxing authorities in doing so. Question No. 1, therefore, has to be answered against the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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