1981 (8) TMI 98

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.... are also common. 3. The common issue in these appeals is there in Ground No. 1 of Memorandum of Appeals, and the same is reproduced hereinafter; "On the facts and in the circumstances of the case, the CIT (Appeals)erred in holding that the assessee-Trust is not discretionary trust and consequently erred in holding that the provisions of s. 164(1) of the IT Act are not applicable in the case of the assessee" 4. The relevant facts, in brief, are that Trusts were created by Mrs. Suneetiraje A. Apte and Mrs. Manorama L. Apte by settling 75% of their right, title and interest in the firm of M/s. Yamuna Textiles on Trusts termed as Mrs. Suneetiraje A. Apte Trust and Mrs. Manorama L. Apte Trust for their relatives. The assessee filed their ....

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....d dissatisfied with the orders of the AAC, has preferred these appeals. Shri Inamdar, ld. counsel for the assessees, contends that there is no discretionary trust described or defined in the IT Act, 1961, and the case of the assessees is to be decided in accordance with the provisions of s. 164 of the Act; that the requirements of s. 164(1)of the Act are that the beneficiary and the share of the beneficiary are to be specific and definite and these conditions are there in the previous year; relevant for the assessment year under consideration; that no doubt cl. 5(c)is there in the Trust, but it is not acted upon in the previous year; relevant for the assessment year under consideration, and as such, in view of the provisions of s. 164(1)of ....

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....e is no dispute that the beneficiaries and in the previous year relevant for the assessment year their respective shares are not determinable in the previous year; relevant for the assessment year under consideration. However, the ITO, on considering cl. 5(c) of the Trust deed, took the view that the Trust is discretionary, but, there is no resolution passed by the trustees in the previous year; relevant for the assessment year under consideration in accordance with the cl. 5(c) of the Trust deed, and as such, no power vested by cl. 5(c)has been exercised by the Trustees, and when this is the situation, then the ITO was not justified in taking the view that the provisions of s. 164 of the Act are not applicable to the facts and circumstance....