1. This is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue and the following question of law has been referred by the Tribunal for answer of this court :
' Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the provisions of Section 161(1) of the Income-tax Act, 1961, were not applicable and the assessee could not be assessed as an association of persons ?'
2. The brief facts giving rise to this reference are thus : The assessee-trust was created by the settlor, one Shri Sohanlal, by settling a sum of Rs. 5,100 for the benefit of minors, Rajesh, Satish, Ravi Kumar and Ku. Rinku. The assessee claimed that it is not liable for tax being a specific trust with the beneficiaries having specified shares. The Assessing Officer accordingly assessed the trust as an association of persons. In appeal, the Appellate Assistant Commissioner directed to assess the income of the trust in the hands of the beneficiaries and not to tax the trust in the status of association of persons.
3. Aggrieved against the order of the Appellate Assistant Commissioner, the Revenue filed an appeal before the Tribunal and the Tribunal relying on the decision given by the Bombay High Court in CIT v. Marsons Beneficiary Trust : [1991]188ITR224(Bom) , dismissed the appeal of the Department. Hence, the Department approached the Tribunal for making a reference before this court and, accordingly, the Tribunal referred the aforesaid question to this court for answer.
4. The Tribunal in similar circumstances in the case of Oswal Traders, referred a question to this court for answer and hence that reference was answered by this court (see page 195 supra).
5. We have heard learned counsel for the parties and perused the records. As per the finding given by the Tribunal, the beneficiaries are known and their shares are fixed. Therefore, the Tribunal concluded that the business income is required to be distributed to the beneficiaries and accordingly, the Tribunal directed not to assess the income of the trust in the status of an association of persons.
6. Shri V. K. Tankha, learned counsel for the applicant/Revenue, has invited our attention to the decision of this court given in Oswal Traders v. CIT : [1997]228ITR195(MP) decided on March 18, 1996, in Miscellaneous Civil Case No. 151 of 1990. In that case, the shares of the beneficiaries were not determinate and that the beneficiaries were not entitled to the profits and the same was deferred for a period of 20 years as the beneficiaries had no right to receive any income. Therefore, the beneficiaries were not to get any income whatsoever from the trust for a period of 20 years and it was held that it was to be assessed as an association of persons. As against this, in the present case, as per the finding given by the Tribunal, the shares are determinate and the business income is required to be distributed to the beneficiaries. Therefore, this case stands on a different footing and the ratio laid down in the case of Oswal Traders v. CIT : [1997]228ITR195(MP) is not applicable in the present case. In this view of the matter, we are of the opinion that the Tribunal has rightly approached the matter. Hence, the aforesaid question is answered in favour of the assessee and against the Revenue.