TIRUSELVI 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 26-8-1988 of the CIT (A) - I, Madurai relating to the assessment year 1980-81.
(2.) The admitted facts of the case are that one K.A.A. Sankaralingam on 1 -6-1974 executed a trust deed wherein his son, A. Tenzing, was to be the sole beneficiary till his (Tenzing's) marriage. The deed also specified that on the said Tenzing's marriage, his wife would become the sole beneficiary and that the corpus and accumulated income of the trust shall be handed over to the wife of the said Tenzing within one year from the date of marriage. One K.A.A. Arunachalam was appointed the trustee.
The said family trust was a partner in a firm styled 'Meena Match Industries'. It is a matter of record that the said firm adopted calendar year as its year of account.
It is also a matter of record that the income of the trust (of which Tenzing was the sole beneficiary) was being assessed to tax in the hands of the trustee in representative capacity upto and including the assessment for the assessment year 1979-80.
The said Tenzing married Tiruselvi on 26-8-1979, that is to say during the calendar year 1979. Thereupon, in relation to the assessment year 1980-81, the trustee filed two separate returns of income, one relating to the period 1-1-1979 to 26-8-1979 and the other relating to the period 27-8-1979 to 31-12-1979. The said two returns came to be filed on the basis that the share of the trust of the income of the aforesaid firm attributable to the former period belonged to Tenzing and that the share of the trust of the income of the said firm attributable to the latter period belonged to Tiruselvi. For purposes of the said returns, the trustee had taken the trust's share of income of the said firm for the accounting year ending on 31-12-1979 as the starting point and thereafter apportioned the said share income on a pro rata basis.
It is a matter of record that both the above returns were accepted by the Assessing Officer and assessments made in the name of the trustee on a protective basis.
(3.) YET another material fact needs to be noticed and that is that, on her part, Tiruselvi filed her return of income for the assessment year 1980-81 on 30-1-1981, disclosing a total income of Rs. 19,470. The said income, it is common ground, comprised interest on securities, dividends etc. Acting on the said return, the Assessing Officer passed the assessment order for the assessment year 1980-81 on 17-2-1981.;
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