B.J.DIVAN, J. - (1.) IN this case at the instance of the Revenue the following question has been referred to us for our opinion: - "'Whether, on the facts and in the CITcumstances of the case, various amounts totalling to Rs. - 18,0001 - received by the assessee of the income of the six discretionary trusts are liable to be taxed in the hands of the assessee?"
(2.) THE assessee is an individual. 'The assessment year under reference is 196970, the relevant previous year of account being Calendar Year, 1968. The Rs. 18,000/ - received by her from the said trusts was not liable to be assessed in her hands and, according to her, the components aggregating to Rs. 18,000/were -taxable only in the hands of the trustees of the respective trusts in view of S~ 164 of the Income -tax Act, 1961. The Income -tax Officer rejected this contention of the assessee and assessed the amount of Rs. 18,000/ - in her hands under S. 166 of the Act. assessee Is a beneficiary under nine different trusts. She is the sole beneficiary in three of the nine trusts and at the time of filing her return for the assessment year under reference, 'she included the income from the said three trusts in her return of income and there is no dispute between the parties regarding the income from those three trusts. The dispute in this case centres round income from other six trusts which are all discretionary trusts. During the year of account, that is, calendar year 1968, the assessee received the following amounts from the said six discretionary trusts in terms of the resolutions of the trustees of the respective trusts as distribution. out of the income which the trustees of those six different trusts received during 1968: - (See Table below) The assesses was not the sole beneficiary in any of these six trusts but in each case she was one of the group of beneficiaries in each of the said trusts. The relevant clause conferring discretion on the trustees of these six different trusts was identical in each case and the clause runs as follows: - "From and after the date hereof (i.e., the date of the Trust deed) and during the periods mentioned in this clause, the Trustees may either accumulate the net income of the Trust or at their discretion pay the same to the persons as mentioned therein or to any one or more of them to the exclusion of others - or other of them for their, his or her absolute use or benefit in such proportion and in such manner as the Trustees may in their absolute discretion think fit........" Thus the payment of income to any one or more of the beneficiaries depended upon the absolute discretion of the trustees and hence the shares of the beneficiaries including the assessee under each of these six trusts were indeterminate and unknown. The assessee contended that this income aggregating to ________________________________________________________________________________ __ S. No. Name of the Trust Amount ________________________________________________________________________________ __ 1. Geeta Mayor B. Trust No. 1 Rs.1,600/ - 2. Ambalal Sarabhai D. Trust No. 4 Rs.6,200/ - 3. Manorama Sarabhai . (K, 8 D -Trustj Rs.1,000/ - 4. Sarladevi Sarabhai (G. 15) D. Trust Rs.1,400/ - 5. Manorama Sarabhai D. Trust No. 1 Rs.7,300/ - 6. Anand Sarabhai (J. 9) D. Trust Rs.500/ - - - - - - - - - - - - - - - - - - - - Rs.18,000/ - - - - - - - - - - - - - - - - - - - - - ________________________________________________________________________________ __ Rs. 18,000/ - received by her from the said trusts was not liable to be assessed in her hands and, according to her, the components aggregating to Rs.18,000/ - were taxable only in the hands of the trustees of the respective trusts in view or S.164 of the Income -tax Act, 1961. The Income -tax Officer rejected this contention of the assessee and assessed the mount of Rs. 18,000/ - in her hands under S.166 of the Act. Against the decision of the Income -tax Officer, the assessee carried the matter in appeal to the Appellate Assistant Commissioner. The order of the income -tax Officer was confirmed by the Appellate Assistant Commissioner as in appeal the, same view as the Income -tax Officer was taken by the Appellate Assistant Commissioner.
(3.) AGAINST the decision of the Appellate Assistant Commissioner, the assessee took the matter in further appeal before the Appellate Tribunal. The Tribunal held that no part of the trust income is specifically receivable on behalf of or for the benefit of any of 'the beneficiaries including the assessee and, therefore. the assessee's case clearly came within the purview of S. 164, The Tribunal rejected the contention of the Revenue that S. 166 of the Act was applicable. Therefore, the Tribunal held that no direct assessment on the assessee could be made in respect of the said amount of Rs. 18,0001 -. According to the Tribunal the amount of Rupees 18,0001 - could be assessed only in the hands of the trustees of the respective trusts under S. 164 of the Income -tax Act. The Tribunal, therefore allowed the appeal and thereafter at the instance of the revenue the question hereinabove get out has been referred to us for our opinion.;