By a deed dated October 3, 1981, Sri Hirji Pethraj Shah created a private trust known as Gosar Family Trust.
Ladhiben Shamji Shah and 4 Smt.
Nos.2 and 3 are wife and son respectively of No.1 .
S Sri Devchand Shamji Shah, 2 Sri Deepak Devchand Shah, 3 Smt.
There are two sets of beneficiaries.
With respect to the income from the trust properties, the trustees have been given an absolute discretion to distribute the same among the first category beneficiaries in such manner and in such proportion and at such times as they think appropriate.
1 Sri Gosar Devashi Jakharia, 2 Smt.
Sunanda Rajesh Shah were named as trustees.
Clause 7 of the Trust Deed, however, permitted the trustees to accept from any person desirous of making companytributions to the Trust fund such amounts or properties and upon such terms and companyditions as they may think fit subject, of companyrse, that the objects of the companytributions are number inconsistent with the objects of the trust.
The High Court has answered the following two questions referred to it, at the instance of the Revenue, under Section 256 2 of the Income Tax Act in favour of the Revenue and against the assessee Whether, in law and on facts and having regard to the provisions of sub section 1 of section 164 of the Income tax Act, 1961, the assessee is entitled to the companycessional rate of tax?
The second category of beneficiaries are 1 Smo.
Lakhmaben Gosar Jakharia, 2 family members of Sri Devchand Shamji Shah and 3 Smt.
The trust was created with a sum of Rupees five hundred.
It is agreed by the learned companynsel for the appellants that the relevant recitals in the Trust Deeds companycerned in all the appeals are identical.
Whether, in law and on facts and in view of the provisions of the trust deed, the trust cannot be subjected to maximum marginal rate of tax?
Kankuben Gulabchand Shah upto three generations.
Lakhmaben Gosar Jakharia and 3 Sri Mukesh Gosar Jakharia.
P. JEEVAN REDDY.J. Leave granted in Special Leave Petitions.
For the sake of companyvenience and with the companysent of the companynsel for the parties, we treat the facts in Civil Appeal No.1160 of 1991 Gosar Family Trust, Jamnagar as representative of the facts in all the cases.
