2006 (7) TMI 164

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....t under the first level trust. His further submission is that yet another first level trust, namely, Hemesh Family Trust (I. T. R. No. 148 of 1995) is not before this court, so also Chanchalba Family Trust (I. T. R. No. 164 of 1995), which is a second level trust is also not on the board and as these two matters are raising common questions, the matters may be called and be disposed of along with the listed matters. Mr. M. R. Bhatt, learned counsel for the Revenue has no objection. We have accordingly called I. T. Rs. Nos. 148/95 and 164/95. Mr. Soparkar, learned senior advocate for the petitioner, after taking us through the trust deed and the provisions of section 164 of the Income-tax Act, 1961, submitted that the Assessing Officer, t....

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....e legal issue, went on moral aspect of the matter. It is submitted that on a perusal and fair understanding of section 164, Explanation 1(ii), it would clearly appear that tax at the maximum marginal rate could not be levied. Shri M. R. Bhatt, learned counsel for the Revenue, however, submitted that the thrust of the matter in section 164 is on the words" specifically receivable" and in the present matter, by assignment or alienation of the right, title and interest, the beneficiary in the first level trust has asked the trustees to join more people to the first level trust and as such, determination of the shares has become different. His further submission is that the second level trust is some body of individuals, (commonly known as BOIs....

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.... 164 Explanation l(ii) would apply to the present case or not had at all not been considered by the Tribunal. Section 164 Explanation 1(ii) says that: "Explanation.-For the purposes of this section,-. . . (ii) the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is received shall be deemed to be indeterminate or unknown unless the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable, are expressly stated in the order of the court or the instrument of trust or wakf deed, as the case may be, and are ascertainable as such on the date of such order, instrument or deed." The question for determination before the Tribu....