TaxTMI 
TaxTMI 
2002 (2) TMI 312
X X X X Extracts X X X X
X X X X Extracts X X X X
....iled against the separate orders passed by the CIT (Appeals), Trivandrum by a common date of 26-5-1998, and they arise out of the assessments completed under section 143(3) of the Income-tax Act, 1961. 2. The issue raised in all these appeals is common and the facts and circumstances relating to the said completed issue are also similar. Therefore, all these four appeals are clubbed together for disposing them of by a common order. 3. The said private family trust, namely M/s Sreevidya Family Trust, is running a business by name M/s Sreevidya Enterprises. The four assessees in these appeals before us are the beneficiaries of the said Trust. The income of the Trust was first assessed in its hands. The Trust has allocated its income amo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elf mean that the appellant was not entitled to the benefit of that circular. The principle should have been appreciated, rather than denying the benefit on technical grounds. 3. The learned officers below erred in giving a finding that the appellant was not dependent on the testator for support and maintenance. 4. It is not correct to state that the dependence condition is to be strictly construed and examined at the time of each assessment and not at the date of creation of the trust. 5. The learned CIT(A) failed to note the fact that the capital required for having the 'income from other Sources' itself had emanated from the Trust only. A comparison is now sought to be now made after 10 years of creation of the Trust, when notio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....only in such cases where the Trustees are assessed for the income and that law do not apply to a case where the beneficiaries arc assessed in their individual capacities, after allocating their share as per the determinate share provided in the trust dispensation. He pointed out that once the individual beneficiaries are assessed taking recourse to section 166 of the Income-tax Act, 1961, the position cannot be reverted and the provisions applicable to the assessments of income in the hands of the Trustees cannot be made applicable to the assessments to be made in the hands of the beneficiaries individually. The learned Chartered Accountant also submitted that there is no provision in the Income-tax Act to levy maximum marginal rate on a po....
X X X X Extracts X X X X
X X X X Extracts X X X X
....where the assessment is made on the trustee. This is the message conveyed by the provisions of law contained in sections 160 and 161. In the case of a trustee, when assessed as a representative assessee and for the other conditions prescribed and for the income derived out of business, the maximum marginal rate might be applied. But, where the beneficiaries are assessed individually, for their share income from the trust along with other incomes, if any, there is no provision of law contained in the Income-tax Act to apply the rule of maximum marginal rate in such cases. There is no option available for the assessing authority to apply the maximum marginal rate of tax either in the case of the trustee or in the case of the beneficiaries. Th....