The assessee preferred an appeal.
In respect of three of these she was the sole beneficiary, and there is numberdispute about their income.
Accordingly, the Tribunal allowed the assessees appeal.
The Judgment of the Court was delivered by P. BHARUCHA, J. An interesting question arises in these appeals.
The ITO rejected the assessees companytention and assessed the said amount of Rs 18,000 in her hands.
The Appellate Assistant Commissioner affirmed the view taken by the ITO.
In regard to the other six trusts, the assessee was one of the beneficiaries thereunder.
A Division Bench of the High Court referred the matter to a larger Bench, and it was heard by a bench of three learned Judges.
At the behest of the Revenue, the Tribunal referred to the High Court of Gujarat for its opinion the following question Whether, on the facts and in the circumstances of the case, various amounts totalling to Rs 18,000 received by the assessee out of the income of the six discretionary trusts are liable to be taxed in the hands of the assessee?
The assessee preferred a second appeal before the Income Tax Appellate Tribunal.
The payment of incomeunder the said six trusts to any one or more of the beneficiaries thereof depended upon the discretion of the trustees accordingly, the shares of the beneficiaries thereof were indeterminate and unknown.
The income of the trusts was, therefore, taxable only in the hands of the trustees thereof, having regard to the provisions of Section 164 of the Income Tax Act, 1961 hereinafter referred to as the Act .
It is this Has the Revenue an option to assess and recover tax from either the trustees or the beneficiaries of a discretionary trust when the income thereof is distributed and received by the beneficiaries in the accounting year?
The appeals have been heard together and may be disposed of by a companymon judgment, taking, as illustrative, the facts of the lead appeal Civil Appeal No.
