TaxTMI 
TaxTMI 
2003 (11) TMI 52
X X X X Extracts X X X X
X X X X Extracts X X X X
....n referred to us is as to whether the Appellate Tribunal was right in law in cancelling the Commissioner's order under section 263, and proceeding to hold that the status of the trust should not be taken as that of an association of persons. The assessee is a trust created under a trust deed dated September 7, 1981. In terms of the trust deed, the trustees are empowered to carry on any business a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e noticed here that section 161, Income-tax Act, was amended and sub-section (1A) was introduced therein by which in the case of representative assessees having income which includes profits and gains of business, tax, shall be charged on the whole of the income at the maximum marginal rate, only with effect from April 1, 1985, and that provision was not on the statute book in this assessment year....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essed as an association of persons. In the case of N.V. Shanmugham [1971] 81 ITR 310 (SC), the receivers appointed by the court had been, in a suit for dissolution, empowered by the court to carry on business for the purpose of winding up, and the income received by these receivers was sought to be assessed as that of an association of persons. The court upheld such an assessment, observing that:....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and to the same extent as it would be leviable upon and recoverable from the person represented by him. That section does not contemplate the treatment of the beneficiaries of the trust which carried on business as constituting an "association of persons", in cases where the extent of interest of each of the beneficiaries is known and is determinate. It is not possible to accept the submission t....