- In a recent order by ITAT Bangalore dated 30 December 2024, in case of Buckeye Trust, Tribunal’s ruling on key arguments are summarized below:
Tax implications arise in the hands of the trust where the settlor has settled property into such trust which is not exclusively for the benefit of the prescribed relatives of the settlor.
Since the Trust deed allows trustees to add any person or class of persons as beneficiaries, it has been held that that the benefits of the trust were not restricted to relatives only.
Thus, receipt of property by trust from the settlor was held to be taxable under section 56(2)(x) of the Income Tax Act, 1961 (‘the Act’).
Further, it was held by the Tribunal that “Interest in partnership firm” falls in the category of “Shares” and the same is included in the scope of “Shares and Securities” as given in explanation(d) of section 56(2)(vii) of the Act which defines what constitutes “Property”.
- Bangalore ITAT on suo-moto perusal of its above order has recalled the same in its entirety on account of certain inadvertent errors vide order dated 07 January 2025. Matter fixed for hearing afresh on 19 February 2025.
For complete details, please refer the entire judgement at:
DISCLAIMER: – The summary information herein is based on order of ITAT Bangalore dated 07.01.2025. While the information is believed to be accurate, we make no representations or warranties, express or implied, as to the accuracy or completeness of it. Readers should conduct and rely upon their own examination and analysis and are advised to seek their own professional advice. This note is not an offer, advice or solicitation. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies upon it.
PDF version is attached: ITAT Bangalore recalls its order dated 30 December 2024 in case of Buckeye Trust
