Trustee-held partnership income cannot be taxed twice when already assessed in beneficiaries' hands.

Income received by an assessee as trustee of a family trust from a partnership firm could not be assessed again as the trustee's own income when it had already been taxed in the hands of the beneficiaries. The assessee had joined the firm only in a representative capacity, the firm's registration and genuineness were undisputed, and there was no basis to treat the partnership share as personal income. The addition was therefore not sustainable and was deleted, with the assessee succeeding against the Revenue.

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Issues: Whether the share of income arising to the assessee from the partnership firm, in his capacity as trustee of a family trust, could be assessed as the assessee's own income when the same income had already been assessed in the hands of the beneficiaries.

Analysis: The assessee entered the partnership only as trustee of Rangraj Keshrimal Family Trust. The income allocated from the firm had in fact been received for the beneficiaries and was assessed in their hands. The firm was registered, its genuineness was not in dispute, and there was no basis to treat the partnership share as the personal income of the trustee-assessee. In these circumstances, the income could not be brought to tax again as the assessee's income.

Conclusion: The answer was in the affirmative in favour of the assessee and against the Revenue; the deletion of the addition was upheld.

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