COMMISSIONER OF INCOME TAX Vs. SATYANARAYAN SIKARIA

JUDGEMENT

(1.) WE propose to dispose of Civil Rules 77(M) to 80(M) by a common order and the other civil rule by a separate order for the convenience of the parties, of course, with prior concurrence of the counsel for the parties. The application involves common questions of law and facts.

(2.) CIVIL Rules 77(M) to 80(M) :

(3.) THE petitioner states that Shri Satyanarayana Sikaria, as karta of his HUF, is the owner of the rice mills named and styled as "Sri Mahabir Rice Mills". He was carrying on rice milling business in partnership with his wife, Smt. Parameswari Devi Sikaria, and his son, Shri Murarilal Sikaria, having 60%, 20% and 20% shares respectively. Subsequently, Shri Satyanarayan Sikaria, for himself and as natural guardian for his minor sons, (2) Smt. Parameswari Devi Sikaria (his wife) and (3) Murarilal Sikaria, executed a trust deed on November 3, 1964, settling all the assets and liabilities of the said Rice Mills in a trust named and styled as M/s. Satyanarayan Sikaria Family Trust (hereinafter referred to as "the trust"), for the benefit of his wife and his sons in their individual capacity in equal shires. There was, however, no partition of the property owned by the HUF. It is stated that under Clause 14 of the trust deed it was stipulated that in case of loss, it should be divided among the major beneficiaries. The trust deed provided that "the trust would cease on the attainment of majority by the minors and on sale or disposal of the properties of the trust or as and when decided by the settlors and the assets would be divided equally among the beneficiaries. "The trust filed its return in respect of the income from the trust properties. The Income Tax Officer (hereinafter referred to as "the ITO"), held the trust as invalid in law on various grounds and accordingly he completed the assessment of the trust in the status of an association of persons (AOP) as a protective measure.