1992 (6) TMI 3

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....ared equally and that the balance income be allocated to Jhaverbai Patel Charitable Trust No. II ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that this is a case of diversion of income at source and not of application of income ? " This application is made to us upon the refusal of the Tribunal to state the case and refer these questions to us. The relevant facts are as follows : The respondent-trust was created under a deed of trust dated April 27, 1984 (?), by Sarojben Jhaverbhai Patel for the benefit of her three granddaughters, Nina, Varsha and Bharati. She set aside a sum of Rs. 1,00,000 for this purpose. Under the terms of the deed of trust, the three beneficiaries ....

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....ome-tax (Appeals). Thereafter, on the refusal of the Tribunal to refer the above questions to us, the present application has been made. Under section 58 of the Indian Trusts Act, 1882, the beneficiary, if competent to contract, may transfer his interest, but subject to the law for the time being in force as to the circumstances and extent in and to which he may dispose of such interest. In the present case, all the three beneficiaries, who are competent to contract, were in a position to transfer their interest or any part of it in the trust properties or income from the trust properties. The beneficiaries have, by a deed of assignment of March 29, 1976, assigned their interest and shares in a portion of the income, as set out earlier, ....