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The beneficiaries under each 'subsidiary trust' are two 'associations of persons' consisting of individuals (including minors) and HUFs, According to the learned counsel the shares of each of these individuals/HUFs are indeterminate. He also makes a statement at the bar that (i) none of the trustees in the 'master trust' are beneficiaries in the 'subsidiary trusts', (ii) none of the beneficiaries are related to the 'settlor' of the 'master trust', and (Hi) none of the settlors of the 'subsidiary trusts' are related to each other or to the beneficiaries.

27. Another point raised by the learned counsel is that the profit has been duly credited to the account of each beneficiary. (Balance sheet on page 385 of the paper book.) We, however, find that this fact does not help the assessee as it is not clear whether any amounts have been paid to the alleged 'beneficiaries'. It appears that the entire amount continues to lie with Baldevbhai Dosabhai & Sons (Bombay) of which the proprietor is the 'master trust' (appellant).

28. We would also refer at this point to the statement made at the bar by the learned counsel to the effect that (/) none of the trustees in the 'master trust' are beneficiaries in the subsidiary trusts, (2) none of the beneficiaries are related to the settlor of the 'master trust', and (3) none of the settlors of the subsidiary trusts are related to each other or to the beneficiaries. The learned Commissioner on the other hand has appended a chart to his order in respect of 10 of the 'subsidiary trusts' (beneficiaries) to show the close relationship between the trustees in the 'master trust' and the ultimate beneficiaries of the entire scheme, who are the trustees themselves. The observations of the Commissioner are as under :

What the assessee has done in the present case is first to create a trust, with a certain number of beneficiaries whose shares are determinate in terms of the trust deed applicable to the present trust. The number of beneficiaries is kept so large, that the divisible income of the business carried on escapes taxability altogether making use of the proviso to Section 164(1). The beneficiaries of B.D. Fibre Enterprises Trust, sharing 1 per cent of the income, in turn are themselves trusts which are discretionary as would be seen from a study of the chart attached as Annexure 1 to this order, wherein we have taken 10 cases of the beneficiary trusts and have given the names of trustees, beneficiaries, settlor, the amount settled, etc., respectively.