1989 (7) TMI 68

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n under section 256(2) of the Incometax Act, 1961, the Commissioner of Income-tax is seeking a direction that the Tribunal should refer the following two questions of law arising from its order For the assessment year 1979-80 : "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the provisions of section 64(1)(v....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he Income-tax Act, 1961 ?" Briefly stated, the facts are that the respondent had, along with her husband, created a trust named U. B. Enterprises Trust. The beneficiaries of the trust were their daughter-in-law and her children. Income arose to the said trust and by applying the provisions of section 64(1)(vi), the said income was clubbed in the hands of the respondent and her husband. Being....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....l interpreted section 64(1)(vi) of the Act and came to the conclusion that the transfer of property to a trust for the benefit of the daughter-in-law and the grand children of the assessee did not attract the said provisions. In coming to this conclusion, the Tribunal took note of the fact that with effect from April 1, 1985, clause (viii) was inserted which made it clear that any such transfer to....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the meaning and effect to be given to the words "assets transferred ... indirectly" is important. Would it contemplate the creation of a trust by an assessee for the benefit of grandchildren is to our mind a question which requires the interpretation of section 64(1)(vi). In our opinion, the following questions of law arise and the Income-tax Appellate Tribunal is directed to refer and state t....