Law:

Section:

Section 4 of the Income-tax Act, 1961 - Hindu undivided family - Assessability of - HUF of HC was partitioned and properties were divided between HC, his wife K and son R in equal shares - HC and K executed two trust deeds on same date purporting to constitute a trust of properties respectively belonging to them, beneficiaries being R and his sons - Trust deeds provided (i) that trustees had power, on death of beneficiary to maintain his widow and his male issue and to accumulate surplus for distribution, and (ii) that if before time of division and distribution a beneficiary died leaving only a widow, widow would get hall share belonging to deceased while other half would be liable for distribution among remaining beneficiaries and heirs of other deceased beneficiaries - When beneficiaries in due course came into possession of their respective shares, they were assessed as individuals in respect of their shares but subsequently they claimed by filing a declaration that income accruing to them should be assessed as income belonging to their respective HUFs -Whether claim of assessee-beneficiaries could be accepted - Held, on facts, no Facts A HUF of HC was partitioned by a deed of partition dated 31-3-1950 and various properties were partitioned between HC, his wife K and their son R in equal shares. HC and K executed two trust deeds on the same date, purporting to constitute a trust of the properties respectively belonging to them. The trust deeds contained identical terms and conditions. The trustees in each case were HC, K, their son R and his wife P and the eldest grandson B. The beneficiaries named in the trust deeds were R and his sons B, S, J, I and Y. The trust deed empowered the trustees, inter alia, to exercise an absolute and uncontrolled discretion on the death of a beneficiary to apply his share to the maintenance of his widow and his male issue and to accumulate the surplus to the account of the said beneficiary for distribution. The document also provided that if before the time of division and distribution a beneficiary died leaving only a widow, the widow would get a half of the share belonging to the deceased beneficiary while the other half…

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