COMMISSIONER OF INCOME TAX Vs. SONA FAMILY TRUST

JUDGEMENT

(1.) is reference at the instance of the revenue, the following questions have been referred for the opinion of this Court in respect of assessment year 1981-82 :-

(2.) We have heard Mr Akil Kureshi, learned counsel for the revenue. Though served, none appears for the respondent-assessee.

(3.) Assessee-Sona Family Trust filed its return through one of its trustees in his capacity as a trustee. There were two other trustees. The Income-tax Officer treated them as an association of persons and assessed the income of Rs.12,27,975.00 as the income of the association of persons. The Commissioner of Income-tax (Appeals) allowed the appeal of the assessee and the Tribunal confirmed the said decision relying on the decision of this Court in KT Doctor vs. CIT (Guj.), (1980) 124 ITR 501 where this Court took the view that when the trustees are authorized to start any business, the business so done must be taken to be the business of the trust and the business itself would be property held under the trust. The trustees carried on the business and, therefore, the income of the business must be held to be the income of the trust. K.T. Doctor's case was carried in appeal to the Supreme Court (230 ITR 744). The Apex Court dismissed the appeal of the revenue with the following reasons :-