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October 2024

A determinate trust with sole beneficiary was liable to be taxed at same rate as applicable to its beneficiary.

By Jagdish T Punjabi, Chartered Accountant
Devendra Jain & Aditya Bhatt, Advocates
Reading Time 2 mins
46 ITO vs. Petroleum Trust (2024) 165 taxmann.com 504 (MumTrib) ITA No.: 2694(Mum) of 2024; C.O. No. 133 (Mum) of 2024 A.Y.: 2021-22 Dated: 2nd August, 2024 S. 161 A determinate trust with sole beneficiary was liable to be taxed at same rate as applicable to its beneficiary. FACTS The assessee was a discretionary trust, which held investments mainly for its beneficiary, RIIHL. RIIHL, being a limited company, opted to be taxed under the new tax regime under section 115BAA by filing Form 10-IC claiming to be taxed @ 22 per cent (+surcharge / cess). The assessee-trust, being a representative assessee under section 161, claimed to be taxed at same rate applicable to its beneficiary in its return of income. The tax department disagreed with this position. CIT(A) accepted the status of the assessee as a representative assessee under section 161 and held that since the assessee is a determinate trust with RIIHL as its sole and 100 per cent beneficiary and
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