TaxTMI 
TaxTMI 
2014 (8) TMI 601
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....rder. 2. In both these cases the respective references have been made by the learned Income Tax Appellate Tribunal (hereinafter referred to as "Tribunal") to consider the following common question of law. "Whether on the facts and law and in the circumstances of the case, the Tribunal was right in law in holding that income, which according to the Trust Deed was required to be allocated to the Ten beneficiaries of the Second Schedule of the Trust Deed, having aggregate beneficial share of 50%, was liable to be taxed at maximum marginal rate u/s.164 of the I.T. Act?" 3. That the facts leading to the present references in nutshell are as under: 3.1 That one Shri Babubhai Ishwarbhai Patel settled Trust Deed dated 04.06.1980 appoint....
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....rust Deed vide Clause III(b)(i) (50.0% of Income) Sr.No. Name of Beneficiary Share of Beneficiary 1 Minor Kalpna Bhagwandas 5% 2 Minor Mahesh Bhagwandas 5% 3 Minor Lalo Bhagwandas 5% 4 Minor Devila Prabhudas Patel 5% 5 Minor Savita Prabhudas Patel 5% 6 Minor Hitesh Prabhudas Patel 5% 7 Minor Nitesh Prabhudas Patel 5% 8 Minor Janak Pramodbhai Patel 5% 9 Minor Sangita Jagdishbhai 5% 10 Minor Alkesh Jagdishbhai 5% Total: 50.00% K.V. Patel Family Trust Schedule-II forming part of this Trust Deed vide Clause III(b)(ii) (50.0% of Income) Sr.No. Name of Beneficiary Share of Beneficiary 1 Minor Kalpna Bhagwandas ....
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.... Trust at the maximum marginal rate under section 164(1) of the Income Tax Act, 1961. The assessee made written submissions and thereafter considering the same, the learned CIT set aside the assessment orders for both the years i.e. 1982-83 and 1983-84 and directed the ITO to subject the income allotted to ScheduleII to tax at the maximum marginal rate in the hands of the Trustees and to take consequential action for the levy of statutory interest under section 139 etc. That the assessee preferred appeals before the learned Tribunal and the learned Tribunal has dismissed both the appeals of the assessee and thereafter at the instance of the assessee, present reference application being Income Tax Reference Application No.67/2005 is made. Ho....
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....hedule-II to tax at the maximum marginal rate in the hands of the Trustees is the beneficiaries' income receivable by the beneficiaries to the extent of 50% after 19 years. 4.2 Having heard learned Counsel appearing on behalf of the respective parties and considering the Trust Deed more particularly the share allotted to the respective beneficiaries - Schedule-I and Schedule-II, it appears that the shares which are allotted to the respective beneficiaries even with respect to Schedule-I and Schedule-II are specific shares and therefore, the same can be said to be determinative shares. Merely because 50% of the income and their respective shares were to be accumulated as a special fund in the hands of the trustees for 19 years and the sam....