TaxTMI 
TaxTMI 
2019 (3) TMI 1038
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....ncome Tax Appellate Tribunal on 23.3.2017 for the Assessment Years 2008-2009 and 2009- 2010:- "i) Whether the Tribunal was right in conceding that the Assessee Trust was a revocable one entitled to claim status under section 61 when the Trust Deed itself clearly state that as per clause 29 it was an irrevocable Trust which would come to an end only when all the contributors as a whole decide to put an end to it? ii) Whether the Tribunal was right in treating the Assessee is not a commercial in nature especially when the Assessee has submitted Form 3CB and 3CD complying with the provisions of Section 44AB which would imply that the Assessee is a commercial enterprise? iii) Whether the finding of the Tribunal is cor....
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.... distributed to them by the said Trust. The Tribunal invoked Section 61 of the Income Tax Act, 1961 and held that the income arising by virtue of a revocable transfer of assets shall be chargeable to the income of the transferor and shall be included in his total income. The relevant paragraph of the order passed by the Income Tax Appellate Tribunal is quoted below for ready reference:- "From the above extracts of the Paper Book, which are extracted from the Trust Deed and the contributor's agreement, it is evident that the assessee is not carrying on any business with commercial motive. The beneficiaries of the trust are identifiable and the shares are determined by contributor's agreement and the contributors are free to ....
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..... 5. On the other hand, Mrs.Pushya Sitaraman, learned Senior Counsel appearing for the Assessee, relying upon the basic documents in question, which were on record of the Revenue viz., Contribution Agreement dated 18.11.1996 and Trust Deed dated 29.11.1996, submitted that even though the Trust was irrevocable by the Settlor i.e., the Government of Tamil Nadu, but, section 61 and 62 in Chapter V of the Income Tax Act, talks about the 'Transfer' of assets. Section 61 of the Act deals with revocable transfer of assets and Section 62 of the Act deals with Transfer Irrevocable for a specified period. She has urged that the contributions of the 3 Companies viz., HDFC, ICICI and IL&FS are not revocable only for a fixed period of three y....
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.... entitled to call upon the Trustee to cancel all or part of the Units held by it and return the nominal value thereof of such cancelled Units. Therefore, she submitted that the contributions by these 3 companies, was, undoubtedly, a Revocable Transfer of assets/funds to the Trust and by virtue of Section 61 and 62(2) of the Act, the income arising to the Trust could not be taxed in the hands of the Trust and because as per the provision, the same was taxable in the hands of the beneficiaries alone and the fact remains that the said income had been taxed in the hands of the beneficiaries. 7. We have heard the learned counsels appearing for the parties at length and perused the record. 8. The relevant provisions of the Act touching t....
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....any such transfer shall be chargeable to income-tax as the income of the transferor as and when the power to revoke the transfer arises, and shall then be included in his total income. ... " 164.Charge of tax where share of beneficiaries unknown--(1) Subject to the provisions of subsections (2) and (3), where any income in respect of which the persons mentioned in clauses (iii) and(iv) of sub-section (1) of section 160 are liable as representative assessees or any part thereof is not specifically receivable on behalf or for the benefit of any one person or where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown (such income,....