COMMISSIONER OF INCOME-TAX Vs. MARSONS BENEFICIARY TRUST

JUDGEMENT

(1.) IN all these applications, there are certain basic facts which are common. The income-tax applications pertain to the assessment to income-tax of the trustees of trust in which, under the deed of trust, the settlor has given to the trustees a power to carry on business. Under the deed of trust in each application, the income of the trust including its business income is required to be distributed amongst specified beneficiaries in shares which are determinate. The questions which have been posed in these applications relate to the manner of asessment to tax of the business income of the trust.

(2.) ALL these applications relate to the assessment year which are prior to the date when section 161 (1a) was inserted in the Income-tax Act, 1961. This amendment has been inserted by the finance Act, 1984, which effect from April 1, 1985. We are, therefore, concerned with the relevant provisions of the Income-tax Act prior to that date.

(3.) CHAPTER XV of the Income-tax Act, 1961, deals with tax liability in certain special cases. This includes, inter alia, the liability of representative assessees. The relevant portions of the sections in Chapter XV are as under :