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4. According to the ITO, besides the 12 beneficiaries enumerated in the trust deed, the children who will be added on to the families of Shri Subhaschand Chordiya, Sureshchand Chordiya and Shantilal Chordiya will be beneficiaries, but their shares are not determinable with reference to the trust deed. Since unborn children were also given benefit of the trust income, application of rule of perpetuity was to be considered. In clause 3 of the trust deed, the duration of the trust is specified as a period of 18 years from the date of the trust deed, i.e. up to 31-10 2000 or the death of the settlor whichever is later. From this, the ITO concluded that the settlor is not completely disassociated from the trust and trust property as the duration of the trust is liked with the death of the settlor. Since the settlor could live beyond the first limit of 18 years, which is the first limit of the duration of the trust in which unborn children are also beneficiaries, the trust is likely to continue beyond their minority. Therefore, the rule of perpetuity is applicable in this case. Therefore, the transfer of the trust property by the settlor is invalid. Consequently, the trust fails and as a result, the entire income of the trust is assessable in the hands of the settlor. Since the settlor is not totally disassociated from the trust, provisions of section 60 of the Income-tax Act, 1961 are applicable.

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.

13. We shall now consider the question whether the shares of the beneficiaries are known and determinate or equal. Clause 2 of the trust deed specifies at 8.33 per cent for 1 to 11 beneficiaries and at 8.37 per cent for youngest and the last beneficiary Master Alish Kumar Chordiya. It is the contention of the ITO that in view of the fact that the last beneficiary is given 8.37 per cent share, vis-a-vis 8.33 per cent for 11 others, the shares are not equal and therefore, there is a contradiction in clause 3 of trust deed where it says that the income of the trust would be divided among the beneficiaries equally. From this, the ITO concluded that neither the shares of the beneficiaries nor the beneficiares themseleves are deterrminate. Possibly the ITO has taken into account the additional members as the beneficiaries so a to come to the conclusion that even the number of beneficiary is aslo not determinate. In this connection, it is necessary to refer to the judgment of the Calcutta High Court in the case of Bankim Ch. Datta v. CIT [1966] 62 ITR 239. In that case the settlor created a trust for the purpose of performing certain religious functions including services and pooja of particular deities and specificed fixed sum for each with direction to accummulate the surplus for future application. While construing the word shareas appearing in proviso to sec. 41(1) which provided for the application of maximum rate of tax when income or any one part thereof isnot specifically receivable on behelf of any one person or individual shars of the beneficiaries are indeterminate or unknown, their Lordships of the Calcutta High Court held that the word sharemeans fixed, definte fraction or proportion in realation to the income of property. It may mean a definte part or portion of income. Applying the aforsaid interpretatin of the word sharethe share given to the 12th beneficiary viz. 8.37 per cent is a definite fraction of the income of the trust the income of which is 100 per cent. From this point of view the definite fraction of 8.37 per cent specifited as a share of the 12th beneficiary is known and ascertainable share. It is now to be seen whether there is any contradiction between the statement in the trust deed. Clause 2 of the trust deed is releveant for this purpose and therefore, it is reproduced below : "2. Notwithstanding the Trust and provisions hereinabove declare and contained, the Trustees may from time and at any time until the date of distribution out of the capital of the Trust Fund, divide and pay such sum or sums to the beneficiaries as in equally proportions. The Annual income of the Trust shall be divided amongst the beneficiaries as in equally proportions. The Annual income of the Trust shall be divided amongst the beneficiaries at the close of such financial year and also the accumulated undistributed Trust fund shall stand distributed amongst the beneficiaries is as on the closing day of such financial year which will be shared and belonging to concerned beneficiaries as per the provisions of the Trust, which at presently stands as under."

"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.