LALCHAND TIKAMDAS MAKHIJA Vs. KURIYAN J K CIT

JUDGEMENT

(1.) THIS is a case of a trust. The beneficiaries are three minors. The trustees are carrying on business the income from which is equally distributed amongst the minors in accordance with the terms of the deed of trust. The Departmental authorities, applying the Supreme Court decision in the case of N. V. Shanmugham and Co. v, CIT (1971) 81 ITR 310, held that the assessment was required to be made in the hands of the trustees as a BOI, a unit separate and independent from the beneficiaries, This has been challenged by the petitioners under Art. 226 of the Constitution of India.

(2.) SHRI Bhujle, learned counsel for the petitioners, submits that, by judgment dated July 24, 1990, a Division Bench of this Court, to which I was a party, in Income tax Application No. 202 of 1988 CIT vs. Marsons Beneficiary Trust (1991) 87 CTR (Bom) 71 : (1991) 188 ITR 224 ), held that, in a case where the shares of the beneficiaries were known or determinate, the fact that the trust was carrying on business was not material and the assessment had to be made in like manner and to the same extent as it would have been made on the beneficiaries separately. Dr. Balasubramanian, for the Department, on the other hand, submits that the said case is distinguishable inasmuch as, unlike that case, in the present case, all the three beneficiaries are minors.