Law: Income Tax Act, 1961

Section: 161,164

Income-tax----Representative assessee---Trust---Discretionary trust---Amount actually received by beneficiaries---Can be assessed in the hands of beneficiaries---No principle that only trustee can be assessed---Indian Income Tax Act, 1961, Ss. 161 & 164. Held, that even if the trust in question had to be regarded as a discretionary trust inasmuch as the profits had during-the relevant assessment years been credited to the respective accounts of the beneficiaries, it was the beneficiaries in whose hands the income was to be assessed. CIT v. Kamalini Khatau (1994) 209 ITR 101 (SC) fol. JUDGMENT The Income-tax Tribunal in respect of the assessment years 1976-77 and 1977-78 had referred three questions of law to the High Court for its opinion. The main controversy before the High Court was with regard to the applicability of section 161 or 164 of the Income Tax Act, 1961, with regard to the assessment of the profits.. The question was whether on the distribution of the…

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