AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1231
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.... facts and circumstances of the case and in law, the Ld. JCIT(A) was justified in holding that the income of the assessee as per the provisions of Section 161(1) of the Act is taxable in the like manner and to the same extent as it would be taxable in the hands its sole beneficiary M/s Reliance Industrial Investments and Holdings Limited, without appreciating that the provisions of Section 161 of the Act are only applicable to 'Representative Assessee' as defined in Section 160 of the Act and the assessee being a trust does not fall within the meaning of 'Representative Assessee'?" 3. The appellant craves leave to amend or alter or add a new ground which may be necessary." 3. Briefly stated the facts of the case are that the assessee is a Discretionary Trust, which holds investments mainly for its beneficiary, i.e. M/s. Reliance Industrial Investments and Holdings Limited (hereinafter referred to as "RIIHL"). The assessee filed its return of income on 30/12/2021 declaring income of Rs. 3,19,93,08,730/-. Since RIIHL being a limited company opted to be taxed under the new tax regime u/s 115BAA of the Act by filing Form 10-IC claiming to be taxed @ 22% + applicabl....
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....tled to receive on behalf or for the benefit of any person, such trustee or trustees; [(v) in respect of income which a trustee appointed under an oral trust receives or is entitled to receive on behalf or for the benefit of any person, such trustee or trustees." [emphasis supplied] 5.1. The relevant clause is clause (iv) for reason. 6. Section 161 of the Act defines the liability of representative assessee and the same reads as under:- "Liability of representative assessee. 161. (1) Every representative assessee, as regards the income in respect of which he is a representative assessee, shall be subject to the same 24duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially, and shall be liable to assessment in his own name in respect of that income; but any such assessment shall be deemed to be made upon him in his representative capacity only, and the tax shall, subject to the other provisions contained in this Chapter, be levied upon and recovered from him in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him. 25[(1A) Notwithstan....
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....ely acquired flat for their residence. The assessee claimed purchase price of the flat should be deducted from the capital gain arising out of the sale of the said immovable property, under section 54. The ITO negatived the assessees claim on the ground that the trust who was the owner was not residing in the said flat and the beneficiaries who resided therein were not the owners and, therefore, the assessee did not fulfil the conditions laid down in section 54. On appeal, the AAC also negatives the claim of the assessee. On second appeal, the Tribunal, dismissed of assessee's claim on the ground that the excess amount realised by the trustee would be income in her hands and the said income could not be said to be income receivable on behalf of the beneficiary. The Tribunal came to the conclusion that the question of applicability of section 161 did not arise in the instant case. On reference : 8.1. On considering the aforementioned facts, the Hon'ble Court held as under:- HELD "By reason of section 160, the trustee appointed under a trust deed or will is a representative assessee in respect of income which is received by the trustee, or which the trustee is entitled to recei....
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....y. The fiction is created as it was never the object or intention of the Act to charge tax upon others than the beneficial owner of the income. Thus it is implicit that the tax could be leviable upon and recoverable from the persons represented by the representative assessee. The trustee, therefore, can be assessed in respect of the income of the trust and tax can be recovered from him only under and in the manner provided by sections 160 to 166. The Act also gives an option to the authorities to either directly levy tax on the beneficiaries or to levy tax upon the trustee in a representative capacity. Thus under the Act, the Revenue has discretion either to assess the trustee or the beneficiary directly; that the trustee is to be assessed for and on behalf of the beneficiary, the trustee being a representative assessee is subject to the same duties, responsibilities and liabilities as if the income was received by him beneficially and whatever benefits the beneficiary will get in the said assessment must be made available to the trustee while assessing him under section 161. In the instant case the husband of the assessee by a will created a trust and appointed the assessee ....