Commissioner of Income Tax vs Dr. David Joseph Trust No. 1

T.L. Viswanatha Iyer, J.—The question involved in these cases is whether the trust was liable to be assessed u/s 164(1) treating the shares of the beneficiaries as indeterminate or unknown or whether it was liable to be assessed u/s 160(1) treating the shares of the beneficiaries as determinate or known. The trust deed in question is dated May 22, 1972. We construed the provisions of the deed of trust in our judgment in Income Tax (?) Reference No. 143 of 1985 and related matters and came to the conclusion that the shares of the three beneficiaries who were the grandchildren of the founder of the trust were determinate and known. Those cases related to assessments under the Wealth-tax Act and the question involved was whether assessment should have been completed u/s 21(4) or u/s 21(1) of the said Act. We held that the shares of the beneficiaries are known and determinate and that the assessment should be u/s 21(1) of the Act.

The point to be noted is that we construed the deed of trust and came to the conclusion that the shares of the beneficiaries were known and determinate. If that be the position the assessments under the Income Tax Act have also to be completed u/s 160(1) as held by the Tribunal and not u/s 164(1) of the Income Tax Act, 1961. The decision in Income Tax (?) Reference No. 143 of 1985 and related matters squarely applies to the facts of these cases. If there is no referable question of law the petitions entail dismissal.

Counsel for the Revenue had a further submission based on Explanation 1 to Section 164(1). The contention was that the deed of trust in question did not expressly state the shares of the beneficiaries and, therefore, their shares should be deemed to be unknown. We dealt with a similar Explanation in Section 21(4) of the Wealth-tax Act in our earlier judgment and came to the conclusion that the shares of the beneficiaries had been expressly stated, so that the similar Explanation to Section 21(4) was not attracted to the facts of these cases. We do not, therefore, find any substance in the contention of Sri N. R. K. Nair that the Explanation applies to these cases and that the shares of the beneficiaries have to be treated as indeterminate and unknown. Following our judgment in Income Tax (?) Reference No. 143 of 1985 and related matters we hold that there is no question of law liable to be referred in these cases.

Accordingly we dismiss these petitions.