Kinnary Family Trust - Applicant(S v. Commissioner Of Income-Tax - Respondent(S

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 108 of 1997With INCOME TAX REFERENCE No. 109 of 1997With INCOME TAX REFERENCE No. 110 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG HONOURABLE MR.JUSTICE M.R. SHAH =========================================================1[Whether Reporters of Local Papers may be allowed ]to see the judgment ?1[Whether Reporters of Local Papers may be allowed ]to see the judgment ? 2To be referred to the Reporter or not ? 3[Whether their Lordships wish to see the fair copy ]of the judgment ?Whether this case involves a substantial question of law as to the interpretation of the 4constitution of India, 1950 or any order made thereunder ?5[Whether it is to be circulated to the civil judge ]? ========================================================= KINNARY FAMILY TRUST - Applicant(s) Versus COMMISSIONER OF INCOME-TAX - Respondent(s) ========================================================= Appearance :MR R.K. Kothari for the Applicant(s) : 1,MR MANISH R BHATT for Respondent(s) : 1, ========================================================= CORAM :HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE M.R. SHAH Date : 30/08/2006 ORAL COMMON JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG) ITR/108/1997 Mr. R K. . Kothari, learnedcounselfortheassessee.Mrs. Bhatt, learned counsel for the Revenue. The parties areheard. 2.TheIncomeTaxAppellateTribunal, Ahmedabad'A'has referred the following question to this Court for its opinionarisingoutofIncomeTaxAppealNo. 1444 & 1445 Ahd 92//relating to assessment years 1985 86 and 1986 87--; 'Whetheronthefactsandinthecircumstances of the case, the income taxAppellate Tribunal was right in law in holdingthat the assessee trust was a discretionaryfamily trust liable to be taxed at maximummarginal rate ?' 3.In Income Tax Reference No. 109 of 1997 the Income,TaxAppellateTribunal, Ahmedabad'A'hasreferredtheabovesaid question to this Court for its opinion arising out ofIncomeTaxAppealNo. 1442 & 1443 Ahd 92//relatingtoassessment years 1985 86 and 1986 87--. 4.In Income Tax Reference No. 110 of 1997 the Income,TaxAppellateTribunal, Ahmedabad'A'hasreferredtheabovesaid question to this Court for its opinion arising out ofIncomeTaxAppealNo. 1440 & 1441 Ahd 92//relatingtoassessment years 1985 86 and 1986 87--. ITR/108/1997 3/3JUDGMENT 5.Learnedcounselforthepartiessubmitthatthepresent Tax References would be squarely covered by our orderdated 13 7 2006. .passed in Income Tax Reference No. 149 of1995 in the matter of Sanjiv Family Trust Vs. . . . C I TThe partiessubmit that the orders passed by the Tribunal may be set asideand the matters may be remanded back to the Tribunal with adirectionthattheTribunalshalldecidethemattersafreshinaccordance with law. The orders of the Tribunal are accordinglyset aside with direction that the Tribunal would be entitled toreconsider the entire matter and redetermine the liability of theassessee i e, . ., the beneficiary of the first level Trust. It would beopen to the Tribunal to reconsider the matter and decide thematter in accordance with law after taking into consideration thejudgments in the matter of McDowell & Co Ltd.. . . . ., v C T O154 ITR148; Union of India v . Azadi Bachao Andolan, 263 ITR 706; 263ITR 706; 209 ITR 101; and 231 ITR 540. As we are remandingthemattersbacktotheTribunal, werefusetomakeanyobservation on the merits of the matters as the same is likely toaffect the rights of the either party. All the References standaccordingly disposed of No costs. . rmr.