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9. The learned departmental representative has been duly heard and he vehemently supported the reasons and conclusions drawn by the authorities.

10. We have duly considered the rival submissions and the record. Clause 3 of the deed of trust dated 31-10-1982 in the assessees case reads as under :

3. Upon expiration of the period of 18 years from the date of these persons, on the death of the SETTLOR herein whichever is later or in case the aforesaid beneficiaries die before the aforesaid date, then upon the death of the last survivor of the afroesaid beneficiaries whichever event occurs earlier or any earlier date as the TRUSTEES may in their absolute discretion think fit and proper (hereinabove or hereinafter referred to as the DATE OF DISTRIBUTION), the Trustees shall divide the trust fund, the income thereof and all the accumulations hereto into pay the same to the beneficiaries equally. Each of the beneficiaries shall be sole and absolute owner of his or her share provided however that if any of the said beneficiaries dies before the date of distribution, accretion and all returns thereto will be distributed amongst the legal heirs of the said deceased excluding the settlor as per the law relevant to succession then in force and in no circumstances any part either or corpus shall ever paid to the settlor."

After enumerating the 12 beneficiaries, the perainble also says any other additional members of the families of Shri Subhashchand Chordiya, Sureshchand Chordiya and Shri Shantilal Chordiya also would be called and referred collectively as beneficiaries. In other words, besides the existing 12 beneficiaries, the preamble also provides that any addition to the family members of the male beneficiaries would also be beneficiaries of the trust. It is these additional members who will be treated beneficiaries which made the ITO to feel that the trust has transferred property to unborn persons also and therefore rule of perpetuity was violated. Sftrictly Speaking, sec. 14 of the Transfer of Property Act does not prohibit vesting of property in unborn child which was not in existence at the time of transfer of property, but it is subject ot the prior vesting of the property in the existing beneficiaries and ultimate vesting in kthe unborn child should be the whole interest of the property as per sec. 13 of the Transfer of Property Act. Thus even sec. 13 provides for transfer of property in favour of a person not in exstence at the date of transfer subject ot a prior interest created by the same transfer, say in the name of turstee. A perusal of the preamble does not show that any interest is created specifically in respect of any particular unborn person belonging to any family of particular existing beneficiary. It simply provides for any additional members will aslo be treated as beneficiary. This is a contigency provision and therefore, the trus as such has not vested any interest in unborn beneficiary. In his anxiety, the settlor has included additional members of the male beneficiaries should also be benefited by the trust. Thus the provision of modern rule of perpetnity is not violated by the trust under consideration. The Tribunal in the case of Ashish Beneficial Trust (supra) where similar clause 3 was incorporated in the turst deed came to the conclusion that that clause did not violate the modern rule against perpetuity. There is another angle in which same conclusion could be arrived at. The period of the trust or the date of distribution of the trust is contained in clause 3 which has been already extracted above. The period is 18 years from the date of trust deed or the death of the settlor whichever is later or death of the settlor whichever is later or death of the existing beneficries if all the existing beneficiaries die before that date then the last date of death of the beneficiary whichever is earlier or any earlir date the trustee may decide in their absolute discretion. In other words, the trustee have got absolute discretion to determine the distribution of the trust fund even earlier to 18 year or death of the settlor or death of all the beneficiaries. Thus, sec. 17 of the Transfer of Property Act pertaining to accumulation of the income from the property is not violated. Therefore even if an unborn person is also eligible as beneficiary if he were to be born after the date of execution of the trust, the vesting of the trust would not exceed the majority of such unborn person. This is a possibility and not in the realm of conjecture based on the period of distribution of trust fund. Therefore, in the circumstances we are of the opinion that the modern rule of perpetuity contained in secs. 14 and 17 is not violated by clause 3 of the trust deed under consideration.

12. We shall now see whether the settlor himself is benefited in any manner out of the trust income or fund in any manner whatsoever. From clause 3 which provides for period of distribution of trust fund which contains the date of death of the settlor as one of the periods, the ITO concluded that the settlor was not completly disassociated from the trust and trust property. In our view the inference drawn by the ITO is wrong because even besides provding for exclusion of the settlor from the benefit of the trust, there is a specific exclusion of the settlor to inherit the property of the deceased beneficiary even as a legal mheir to such beneficary, vide later part of clause 3 of the trust deed italicised. The inference of the ITO that the duration of the trust is likely to be beyond the minority of the unborn children is also not correct, in view of the overriding absolute discretion given to the trustees to determine the period of trust and distribute trust property to the beneficiaries earlier than all other conditions specifed. Therefore, this inference of the ITO is also not correct. In view of our finding that the settlor is specifically excluded from the trust fund as well as from the income of the trust and also from inheriting any portion of the property as a legal heir of the beneficiary, provision of sec. 60 of the Income-tax Act is not applicable.

"The question in regaerd to the applicability of sub-sec. (1) or (4) of sec. 21 has to be determinded with reference to the relevant valuation date. The WTO has to determine who are the beneficiaries in respect of the remainder on the relevant valuation date and whether their shares are indeterminate or unkown. It is not at all relevant whether the beneficiaries may change in subsequent year before the date of distribution, depending upon cintingencies which may come to pass in future. So long as it is possible to say on the relevant valuation date that the beneficiaries are known and their shares are determinate, the possibilty that the beneficiaries may change by reason of subsequent event such as brith or death would not take the case out of the ambit of sub sec. (1) of sec. 21. The position has to be seen on the relevant on that date and if, on the preceding life interest had come to an end on that date and if, on that hypothesis, it is possible to determine who precisely would be the beneficiaers and on what determinate shares, sub-se. (1) of sec. 21 must apply and it would be a matter of no consequence that the number of beneficiaries may vary in the future either by reason of some beneficiaries ceasing to to exist of some new beneficiaries coming into being. From the above extract, it is cleaer that we have to look to the position as on the relevant valuation date to come to the conclusion whether the beneficiaries are known and their shaeres were determinate or not. It is also not relevant whether the beneficiary is changed in subsequent year before the date of distiribution on account of birth or death. Further we have to proceed on the assumption that the date of distribution is the relevant accounting year and to see whether the beneficiaries are known and their shares are ascertainable. It is only when it was not possible to say with certainty and befiniteness as to who are the beneficiaries and whether their shaeres ar determinate and specific, the case will be governed by sec. 21(4) equivalent to sec. 161(4) of the Income-tax Act. 1961. The Madras High Court in the case of CWT v. Trustees of the Estate of V. R. Chetty & Bros. [1979] 120 ITR 329 enunciated the same principle as laid down by the Supreme Court, viz, : "so long as it is possible to say that on the relevant date the beneficiaries are known and their shares are determinate, the possibilty that the beneficiaries may change by reason of sub-sequent events such as brith or death would not take the case out of sec. 21" equivalent to sec. 161(1) of the Income-tax Act, 1961. In that case, when the trust was made, there were two sons of the settlor and the beneficiaries included their sons that would be born to the settlor till the first son attained the age of 21. Ultimately three more sons were born till the first attained the age of 21 and all the 5 sons were held to be beneficiaries entitled to 1/5th each and even in such situation, application of sec. 21(1) of the Income-tax Act, 1961. As the facts stand on the respective respective accounting year, the beneficiaries are known and their shares are also determinate. Consequently, application of sec. 161(4) is not called for. In view of the specific share of income of the beneficiaries specificed in clause 2, it is not open to the trustees to vary the same at their discretion as opined by the ITO. This is a specific trust created by the settlor in favour of existing beneficiaries with a direction to the trusstees to distribute the income in specified fraction and the corpus of the trust fund equally and therefore, it is not a discretionary trust. Since the beneficiaries as on the relevant accounting year ending on 31-3- 84 are known and ascertainable and their shares are also determinate and ascertainalble and their shares are also determinate and ascertainalble, the trust is to be assessed not at maximum marginal rate in terms of sec.. 161(4) as opined by the ITO. On the other hand, the trustee is to be assessed in a representative capacity u/s 161(1) of the Income-tax Act, 1961 as held by the Tribunal in the case of Trustees of Anilkuumar Trust (supra). Another point which was relied upon by the ITO to apply provisions of sec. 164 relate to female beneficiary viz. Miss Sarika Chordiya Clause (4. a) of the trust deed provides, upon the date of her marriage before the date of distribution, she will cease to be the trust. But the same clause provides that in the event of marriage, the amount lying to the credit of such beneficiary and the the proportionate share of the trust fund along with the accumulted income should be handed over by the trustees to the female beneficiary at the time of her marriage or the amount might be applied for the purpost of her marriage. In other words, either the amount should be given as dowry or marriage expenses shluld be met by the trustees of the female beneficiary. As on marriage she ceased to be the member of family as per the custom of Hidus, the benefit of the trust is not extended to her after marriage. This does not mean that female beneficiary became disentitled to the trust fund because portion of the trust fund due to her is paid to her on the date of marriage. In any case, this is the condition preecribed by the settlor over which there could be no grievance for any body elso. In view of the authorities of the Supreme Court and Madras High Court cited (supra), the CIT (A) was not correct in observing that clause (4. b) provides, for person who are not presently alive nor in existence i.e. unborn children and threby coming to the conclusion that the trust is not valid, because there is ambiguity and therefore it is void. The ITO as well as the CIT (A) were not justified in coming to the conclusion that because the trust is void or not vaild, the entire income of the trust is assessable in the hands of the settlor because the trust is a specific trust and vaild trust in terms of the legal authority cited and therefore they are not justified in concluding that the entire income is be assessed in the hands of the settlor. Since the position of the beneficiaries and their shares is to be ascrtained only as on the last date of the financial year, viz 31-3-84 and if it is done so, there is no question of the beneficiaries being indeterminate or the shares being in determinate or unknows. On the contrary, the beneficiaries are known and determinate and their shares also are known and determinate. Since this is a specfic trust, provisions of sec. 161(1) applies in view of the decision of the Supreme Court and Madras High Court cited (supra). Consequently, we reverse the order of the CIT (A) and direct the ITO to assess the income substantively u/s 161(1) and not protectively u/s 161(4) of the Income-tax Act, 1961.