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3.When the matter was carried to the Tribunal, in the Revenue Appeal Nos. 930 to 933 / AHD / 1986, from which the present reference arises, two Members of the Bench differed and their opinions were referred to a third member, who expressed the view that the assessee was not liable to pay gift tax in respect of the declaration made on 31st December 1970.

3.1In his opinion rendered by the Judicial Member, it was held that the trust created under the deed dated 11-4-1961, which was initially irrevocable, became revocable at the end of six years and one day. On 31-12-1970, the settler did not revoke the entire trust but only substituted clause 2(b) and clause (3) thereof and revoked clause (15) under which the trust was earlier revocable at the end of the said period. The learned Judicial Member observed that the settler had parted with the property under the settlement deed dated 11-4-1961 which did not revert to him and the same trustees continued to be the legal owners of the trust property. Moreover, the subsequent deed dated 31-12-1970 was executed on a stamp paper of only Rs.100 and not on the basis of the valuation of the entire property, as was done in the earlier deed dated 11-4-1961. 3.2The Accountant Member, in his differing opinion, held that the property transferred under the settlement deed dated 11-4-1961 and under the deed dated 31-12-1970, was different. According to him, "What was transferred originally was right to receive income for specified period for which value is to be determined under Section 6(2) and not under Section 6(1) read with Rule 11 of the Gift-tax Rules". It was held that when the deed dated 31-12-1970 was executed, the original trust had already become imperfect because of power of revocation or power to change the class of beneficiaries of income and / or corpus etc. reviving on expiry of the period of six years and one day from the date of the initial deed. Without considering the ratio of the decision of the Supreme Court in Allahabad Bank Ltd. v. C.I.T., reported in 24 ITR 519 (SC), the learned member seems to have relied on it. In the said decision, it was held that, in view of the uncertainty as regards the beneficiaries and absence of any obligation to grant any pension, no legal and effective trust could be said to have been created. That decision was rendered in context of the provisions of the Income Tax Act. The Accountant Member held that the view taken by C.G.T. (Appeals) that there was a fresh gift on the basis of transfer of property with totality of interests in shares covering successive interest was correct and that was required to be valued under Section 6(1).

4.The learned counsel for the Revenue contended before us that, for all intent and purposes, a new trust was created under the deed dated 31st December 1970. He submitted that the increase in beneficiaries in some of the deeds, as also making the shares of the beneficiaries definite in all the deeds, amounted to creation of new trusts. He submitted that the original trust was revocable while and under the new trust, the property was ultimately to be vested in the beneficiaries after a period of fifteen years, and the trust was now made irrevocable. Such drastic changes in the settlement brought about a totally new set up.

10.It was argued that the trust became revocable after six years and one day and therefore, the gift stood revoked and fresh gift was made to the beneficiaries by directing the property to absolutely vest in them after fifteen years and making the trust irrevocable. It was also pointed out that a revocable gift was void under Section 126 of the Transfer of Property Act.

10.1The concept of a gift being void when the donor and donee have agreed that it can be revoked as incorporated in Section 126 of the Transfer of Property Act is altogether different from the concept of revocation of trust as per the power retained by the settler in the Deed of Settlement, as envisaged by Section 77(d) of the Indian Trusts Act, 1882, which, inter alia, provides that, a trust is extinguished when the trust, being revocable, is expressly revoked. There was no express revocation of the trust created under the Trust Deed dated 11-4-1961 nor any resumption of the title to the property which was transferred to the trustees for perfecting the trust under the said Deed of 11-4-1961.

10.2In a living trust, the properties are transferred by the settler to the trustee and the trust comes into existence after it is so funded. The trustee controls and manages the trust property and is responsible for the safe keeping of the trust property. Since the trust is created and operative while the settler is still alive, it is also called living trust which is essentially the same as other trusts. The settler who creates the trust by the Deed of Trust incorporates in it the details for the management and disposition of the property contributed to the trust. When power to alter such details is retained by the settler, he can revise those instructions. But when the trust is perfected by property being already transferred from the settler to the trustee, that position would continue even in a revocable trust until reversed or changed by the settler. Thus, by mere change in the manner of disposition of the trust property, without affecting the creation of the trust and the transfer of trust property which was already effected in the name of the trustees, the trust itself cannot be said to be revoked or the property that was transferred to the trustees cannot be said to have been reverted to the settler by virtue of such changes in the subordinate clauses having bearing on the disposition of the trust property which continued to vest in the trustees. There was, therefore, no revocation of the trust that was created by the Trust Deed dated 11-4-1961 and since the entire property continued to vest in the same trustees even after the changes were effected in clauses 2(b), and, (3) of the original Trust Deed by substituting the new clauses, which had a bearing only on the question as to how the property that already vested in the trustees should be dealt with for the benefit of the cestui que trust, there was no fresh gift made by the Deed of 31-12-1970 and the gift already made by transferring trust property to the trustees when the trust was created on 11-4-1961 and when the gift-tax was paid on the entire value of that property, was never revoked since the trust created and perfected under that deed was not at all disturbed by the changed effected on 31-12-1970.