ANIL ENGINEERING CORPN Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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S. Kannan, Accountant Member -
(1.) THIS appeal by the assessee is directed against the order dated 16-5-1988 of the CIT (Appeals), Coimbatore, relating to the assessment year 1985-86.
(2.) The facts of the case are that by a Deed of Declaration dated 4-7-1977, one P. Seetharaman created a private trust for the benefit of six teenagers. The said Declaration inter alia authorised the trustees, who are three in number, to carry on any business, trade or manufacture with the funds of the trust as also close such business whenever it was expedient so to do. Accordingly, the trustees carried on business in the name and style of Anil Engineering Trust at Coimbatore-18.
Clauses 14 and 15 of the said Deed read as follows:
14. The Trust shall continue for the period of fifteen years and no part of the funds of the Trust shall revert back either to the Authors of the Trust or to the parents of any of the beneficiaries mentioned in the Trust either during the currency of the Trust or thereafter. The Trust can be put to an end to, earlier, if the Trustees decide that it is in the interests of the beneficiaries.
15. At the time of the determination of Trust as stated above the funds of the Trust with the Managing Trustee as on the date of determination and even during the currency of the Trust shall be held in the following manner in respect of the beneficiaries :
(3.) BY a Deed of agreement dated March 31, 1984, the Trustees terminated the trust on March 31, 1984. Clauses 1 and 2 of the said Deed read as follows:
1. As all the Beneficiaries have become majors, the Trustees have agreed and declare hereby that the deed of Anil Engineering Trust stands terminated on 31st March, 1984.
2. The Trustees have handed over to the beneficiaries on 31-3-84 the entire assets and liabilities of the business of the Trust, the receipt of which is hereby acknowledged by the Beneficiaries. The Beneficiaries have expressed their willingness to continue the business.;
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