Deferred trust income for a minor is not taxable in the beneficiary's hands until the stipulated age is reached.

Trust income accumulated for a minor beneficiary under a deed postponing payment until she attained 18 years was not includible in her hands during the postponement period. Because the beneficiary had no present enforceable right to receive the corpus or income before the stipulated age, taxability could not arise until the condition for payment was satisfied. The note reflects the binding principle that where entitlement is deferred by the trust terms, the income remains outside the beneficiary's assessable income until the specified event occurs.

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Issues: Whether the income from the trust created for the benefit of a minor beneficiary was liable to be included in the hands of the assessee-minor before she attained the stipulated age under the trust deed.

Analysis: The trust deed provided that the corpus and income were to be accumulated and paid over to the beneficiary only on her attaining the age of 18 years, and if she died before that age, they were to go to her legal heirs. The governing principle applied was that where the beneficiary has no present right to receive the income and entitlement is postponed by the terms of the trust, the income cannot be treated as taxable in the hands of the beneficiary until the condition for payment is satisfied. This conclusion was consistent with the binding Supreme Court position approving the view that such trust income is not includible in the hands of the minor beneficiary during the period of postponement.

Conclusion: The trust income was not includible in the hands of the assessee-minor for the relevant assessment year.

Ratio Decidendi: Trust income accumulated for a minor beneficiary under a deed postponing payment until a specified age, with no present enforceable right in the beneficiary, is not taxable in the beneficiary's hands until the stipulated condition for receipt is fulfilled.

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