TNE COMMISSIONER OF INCOME T vs. TVS SHRIRAM GROWTH FUND.,

T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.09.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.890, 735, 736 & 916 of 2018, 473, 474, 480, 481, 569 & 570 of 2019 T.C.A.Nos.890 & 916 of 2018 :- The Commissioner of Income tax, Chennai. .. Appellant -vs- M/s.TVS Shriram Growth Fund, 249-A, Ambujammal street, Off: TTK Road, Near Alwarpet Post Office, Alwarpet, Chennai-600 018. PAN: AABIT5582H .. Respondent Appeals under Section 260A of the Income-tax Act, 1961, against the common order dated 07.06.2017, made in I.T.A.No.981/Mds/2016 & I.T.A.No.982/Mds/2016 on the file of the Income Tax Appellate Tribunal 'C' Bench, Chennai for the assessment years 2009-10 and 2010-11 respectively. T.C.A.Nos.735 & 736 of 2018 :- The Commissioner of Income tax, Chennai. .. Appellant -vs- 1/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 M/s.TVS Shriram Growth Fund, 249-A, Ambujammal street, Off: TTK Road, Near Alwarpet Post Office, Alwarpet, Chennai-600 018. PAN: AABTT5582H .. Respondent Appeals under Section 260A of the Income-tax Act, 1961, against the common order dated 28.02.2018, made in I.T.A.No.2443/Chny/2017 & I.T.A.No.2444/Chny/2017 on the file of the Income Tax Appellate Tribunal 'C' Bench, Chennai for the assessment years 2009-10 and 2010-11 respectively. T.C.A.Nos.473, 474, 480 & 481 of 2019 :- The Commissioner of Income tax, Chennai. .. Appellant -vs- M/s.TVS Shriram Growth Fund, Jayalakshmi Estate, No.29 (Old No.8), Haddows Road, Chennai-600 006. PAN: AABTT5582H .. Respondent Appeals under Section 260A of the Income-tax Act, 1961, against the common order dated 15.11.2018, made in I.T.A.No.347/Chny/2018, I.T.A.No.344/Chny/2018, I.T.A.No.345/Chny/2018 & I.T.A.No.346/Chny/ 2018 on the file of the Income Tax Appellate Tribunal 'B' Bench, Chennai for the assessment years 2014-15, 2011-12, 2012-13 and 2013-14 respectively. T.C.A.Nos.569 & 570 of 2019 :- The Commissioner of Income tax, Chennai. .. Appellant 2/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 -vs- M/s.TVS Shriram Growth Fund, 249-A, Ambujammal Street, Off: TTK Road, Near Alwarpet Post Office, Alwarpet, Chennai-600 018. PAN: AABIT5582H .. Respondent Appeals under Section 260A of the Income-tax Act, 1961, against the common order dated 04.04.2018 made in M.P.No.310/Chny/2017 in I.T.A.No.981/Mds/2016 and M.P.No.311/Chny/2017 in I.T.A.No.982/Mds/ 2016 on the file of the Income Tax Appellate Tribunal 'C' Bench, Chennai for the assessment years 2009-10 and 2010-11 respectively. For Appellant : Mr.T.Ravi Kumar, (In all Appeals) Senior Standing Counsel For Respondent : Mr.Percy Pardiwalla, (In all Appeals) Senior Counsel for M/s.Subbaraya Aiyar, Padmanabhan & Ramamani ****** COMMON JUDGMENT (Delivered by T.S.Sivagnanam, J.) The above tax case appeals, under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), have been filed by the Revenue 3/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 challenging the orders passed by the Income Tax Appellate Tribunal (for brevity “the Tribunal”), the details of which are tabulated hereunder:- T.C.A. Nos. I.T.A.Nos./M.P.Nos. in I.T.A.Nos Tribunal Bench Date of Order Assessment Years 735/2018 I.T.A.No.2443/Chny/2017 'C' Bench 28.02.2018 2009-10 736/2018 I.T.A.No.2444/Chny/2017 'C' Bench 28.02.2018 2010-11 890/2018 I.T.A.No.981/Mds/2016 'C' Bench 07.06.2017 2009-10 916/2018 I.T.A.No.982/Mds/2016 'C' Bench 07.06.2017 2010-11 473/2019 I.T.A.No.347/Chny/2018 'B' Bench 15.11.2018 2014-15 474/2019 I.T.A.No.344/Chny/2018 'B' Bench 15.11.2018 2011-12 480/2019 I.T.A.No.345/Chny/2018 'B' Bench 15.11.2018 2012-13 481/2019 I.T.A.No.346/Chny/2018 'B' Bench 15.11.2018 2013-14 569/2019 M.P.No.310/Chny/2017 in I.T.A.No.981/Mds/2016 'C' Bench 04.04.2018 2009-10 570/2019 M.P.No.311/Chny/2017 in I.T.A.No.982/Mds/2016 'C' Bench 04.04.2018 2010-11 2.T.C.A.Nos.735 and 736 of 2018 were admitted on 03.09.2020, on the following substantial questions of law:- “1.Whether the Tribunal was right in deleting the penalty levied under Section 271(1)(c) treating the assessee as a 4/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 determinative Trust and allowing pass through status under Section 161(1) of the Act on the interest income earned by the assessee from the fixed deposit which is a non venture capital undertaking activity and as per the provision of Section 10(23fb) read with Section 115U do not allow the same with effect from 1st April, 2008? and 2.Whether the Tribunal was right in deleting the penalty by treating the assessee as a determinative Trust and allowing it to pass through status under Section 161(1) especially when the shares of the beneficiary are ot incorporated in the deed of Trust by are only shown in the later contribution agreement which is in violation of Explanation 1(ii) to Section 164 of the I.T.Act?” 3.T.C.A.Nos.890 and 916 of 2018 were filed raising the following substantial questions of law:- “1.Whether the Tribunal was right in holding that the assessee is a determinate Trust as per Section 161(1) assessable in the capacity of representative assessee, especially when the shares of the beneficiary are not incorporated in the deed of trust and had only been shown in the Contribution Agreement entered subsequently which is in 5/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 violation of the provisions of Explanation (1)(ii) to Section 164 of the Income Tax Act, 1961? and 2.Whether the Tribunal was right in law and had material to hold that the assessee is a determinate Trust, allowing it to pass through status under Section 161(1) in respect of the interest income earned y the assessee from fixed deposits which is a non VCU activity and is to be assessed in the hands of the assessee's beneficiaries by remitting the said issue back to the file of AO for computing the correct income under various heads in the hands of the beneficiaries especially when the fact remain the provisions of Section 10(23FB) read with Section 115U does not allow such benefit to be granted with effect from 01.04.2008?” 4.T.C.A.Nos.473, 474, 480 and 481 of 2019 were admitted on 19.07.2019, on the following substantial question of law:- “Whether on the facts and circumstances of the case, the Tribunal was right in holding that the assessee Trust was a determinate Trust eligible for pass through status and that the interest income received by assessee funds out of the income made in non venture capital undertaking is to be assessed only in the hands of the beneficiary especially when the fact 6/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 remains that as per the amended provisions of Sec.10(23fb) of the Income Tax Act by Finance Act, 2007 with effect from 01.04.2008, the income derived out of investment in Non Venture Capital undertaking is not exempt in the hands of the Venture Capital Fund like the assessee.” 5.T.C.A.Nos.569 & 570 of 2019 were admitted on 09.08.2019, on the following substantial questions of law:- “1.Whether the Tribunal was right in deciding the miscellaneous petition in favour of the assessee when it had already remitted the said issues back to the file of the Assessing Officer in the main order passed earlier especially when it had no power of review by re-adjudicating the said issues? 2.Whether the Tribunal has powers under Section 254(2) to reappraise the evidence on record and readjudicate the same issues and give a totally different finding to the one earlier given, which it had already decided on merits? 3.Whether the Tribunal was right in holding that the assessee is a determinate trust as per Section 161(1) assessable in the capacity of representative assessee, especially when the shares of the beneficiary are not 7/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 incorporated in the deed of trust and had only been shown in the contribution agreement entered subsequently, which is in violation of the provisions of Explanation (1)(ii) to Section 164 of the Income Tax Act, 1961? and 4.Is not the reasoning and finding of the Tribunal perverse and bad by holding that the assessee is a determinate trust, allowing it to pass through status under Section 161(1) in respect of the interest income earned by the assessee from fixed deposits, which is a non VCU activity and is to be assessed in the hands of the assessee's beneficiaries by remitting the said issue back to the file of the Assessing Officer for computing the correct income under various heads in the hands of the beneficiaries especially when the fact remains that the provisions of Section 10(23FB) read with Section 115U do not allow any such benefit to be granted with effect from 01.04.2008?” 6.Heard Mr.T.Ravi Kumar, learned Senior Standing Counsel for the appellant/Revenue and Mr.Percy Pardiwalla, learned Senior Counsel for M/s.Subbaraya Aiyar, Padmanabhan and Ramamani, learned counsel for the respondent/assessee. 8/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 7.As could be seen from the above tabulated statement, T.C.A.Nos.569 and 570 of 2019 have been filed by the Revenue against the order passed in miscellaneous petitions filed before the Tribunal by the assessee. 8.Two issues which have been raised by the assessee are on the merits, which would be dealt with while dealing with T.C.A.Nos.890 and 916 of 2018 and 473, 474, 480 and 481 of 2019. Two other issues are with regard to the powers of the Tribunal under Section 254(2) of the Act, which we shall deal with after dealing with the merits of the matter. 9.Since the facts are identical and the assessee is one and the same person, T.C.A.No.890 of 2019 is taken as the lead case. 10.The assessee is assessed as an Association of Persons (AoP) and for the assessment year under consideration, viz., 2009-10, the assessee filed their return of income on 31.07.2009. The case was selected for scrutiny and notice under Section 143(2) of the Act was issued on 24.08.2010. The information called for 9/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 was furnished by the assessee. The Assessing Officer opined that the assessee, being an Investment Management Entity, manages the funds of TVS Investments I Fund. As per the Trust Deed dated 01.02.2008, it has been stated that the primary objective of the Trust was to carry on activity of a Venture Capital Fund as permissible under the Venture Capital Fund Regulations and for the purpose of raising resources to make available Venture Capital Assistance to investee companies so as to achieve long-term capital appreciation for contributors/beneficiaries under the respective schemes. The Assessing Officer held that the prime activity of the assessee is to earn profit and the assessee had incurred expenses towards Investment Manager Fees, One Time Set Up Organisational Fee, Establishment Expenses and Administrative Expenses and these were incurred at regular intervals and in a consistent manner. Therefore, the Assessing Officer came to the conclusion that these clearly indicate that the aim of the assessee was to earn profit. Accordingly, the Assessing Officer held that the income arising out of the activities of the assessee has to be assessed as 'income from business' and therefore, the same is liable to be taxed at maximum marginal rate. 10/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 11.It is stated that the assessee is a SEBI registered fund and has the resources to make investment decisions and therefore, the Assessing Officer held that it is hard to believe that the assessee has paid exorbitant figures to the investment manager M/s.TVS Capital Funds Ltd., and this was found to be on the higher side and accordingly, 50% of it was disallowed and the assessee was assessed under Section 37 of the Act. Other deductions were made and ultimately, the assessment was completed under Section 143(3) of the Act, vide order dated 31.12.2011. Aggrieved by such order, the assessee preferred appeal before the Commissioner of Income Tax (Appeals)-4, Chennai (for brevity “the CIT(A))” claiming that they are entitled for exemption under Section 10(23FB)of the Act. The CIT(A) directed the Assessing Officer to tax the interest income earned out of the Fixed Deposits with the banks in the hands of the assessee and the Assessing Officer also passed a giving effect order. Aggrieved by the order of the CIT(A), the assessee filed appeal before the Tribunal contending that it is a contributory Trust and the income of the assessee is to be allowed in accordance with Section 161(1) of the Act. The Tribunal held that the trust was a determinate Trust and the shares of the beneficiaries were identifiable and accordingly, allowed the 11/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 assessee's appeal. As regards the interest, income of the Fixed Deposits with the banks assessed in the hands of the assessee Trust, the Tribunal held that the income should be assessed in the hands of the beneficiaries and not the assessee, since the Trust has been held to be a determinate Trust. Accordingly, the Tribunal set aside the order of the CIT(A) and remitted the issue back to the Assessing Officer to decide the matter afresh on merits and in accordance with Rule 12C and Section 115U for computation of correct income under the head “interest income”. Aggrieved by the same, the Revenue has filed T.C.A.No.890 of 2018. 12.Mr.T.Ravi Kumar, learned Senior Standing Counsel appearing for the Revenue raised the following contentions:- 12.1. The Tribunal missed to note that as per Explanation 1(ii) to Section 164 of the Act, for a Trust to be determinate, both the beneficiary and their individual shares need to be expressly stated in the instrument of a Trust itself and be identifiable/ascertainable as on the date of the instrument which is not the case on hand, since the beneficiary are totally unknown and are identified only by a contribution agreement. 12/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 12.2. The Tribunal erred in law in not considering the fact that the beneficiaries of Venture Capital Fund are identified only by the contribution agreement, that is, Private Placement Memorandum and hence the assessee does not satisfy the condition of Explanation 1(ii) to Section 164 of the Act in order to become eligible to be treated as determinate Trust. 12.3. The Tribunal erred in law in not considering the fact in the case of Venture Capital Fund through a special enactment in the statute dealing under Section 10(23FB) of the Act and the assessee must confirm to the parameters laid down under the above Section and therefore, would be eligible to pass through status but the same would be restricted to the extent of the income derived from VCUs and not the income which is derived from investments in bank deposits. 12.4. The Tribunal failed to note that as per Form 64, which is a document created by a statute wherein the statement of income paid or credited by the Venture Capital Fund to its beneficiary as required under Section 115U read with Rule 12C, it has been clearly signified that the other income such as interest from investment in Venture Capital Undertaking has only to be passed on to the beneficiary. 13/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 13.The learned Senior Standing Counsel further submitted that in respect of the assessee, M/s.TVS Investments I Fund, identical issue was considered by the Tribunal and in I.T.A.No.3339/Mds/2016 for the assessment year 2009-10 by order dated 19.04.2017, the Tribunal dismissed the appeal filed by the assessee. Thus, it is the submission of the learned Senior Standing Counsel that apart from the grounds raised above, the reasons assigned by the Tribunal in its order dated 19.04.2017 in the case of M/s.TVS Investments I Fund would, in fact, be the argument of the Revenue and would support their stand. 14.To be pointed out that as against the said order dated 19.04.2017, the said assessee has filed T.C.A.No.319 of 2018, which will be dealt separately and the outcome of the appeal would depend upon the decision taken in these appeals. 15.Mr.Percy Pardiwalla, learned Senior Counsel prefaced his submissions by stating that the substantial questions of law, which have been raised for consideration in these appeals were considered and answered in favour of the assessee and against the Revenue by the High Court of Karnataka in CIT & Anr. 14/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 vs. India Advantage Fund-VII [(2017) 293 CTR 0510 (Kar.)]. It is submitted that the said decision was rendered by the Court on 01.02.2017 and the Tribunal did not have the benefit of going through the said decision because the Tribunal had heard the appeal in the case of TVS Investments I Fund on 01.02.2017 and has reserved judgment and was pronounced on 19.04.2017. It is submitted that in the impugned order, the Tribunal rightly took note of the order passed by the Bangalore Bench of the Tribunal in the said case, which was affirmed by the High Court of Karnataka in the case of India Advantage Fund-VII. For better appreciation, the learned Senior Counsel has invited our attention to the order passed by the Bangalore Bench of the Tribunal in the case of India Advantage Fund-VII, which has been extensively referred to and extracted in the impugned order of the Tribunal. In paragraph 6.6 of the impugned order, the Tribunal noticed the decision of the High Court of Karnataka in the case of India Advantage Fund-VII. 16.With regard to the issue pertaining to the interest income of the Trust, on whom it has to be assessed, the Tribunal has held in favour of the assessee and has 15/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 given elaborate reasons and has come to a decision by referring to the judgment of the Hon'ble Division Bench of this Court in the case of CIT vs. P.Sekhar Trust [(2010) 321 ITR 304 (Mad.)]. 17.After elaborately hearing the learned counsels for the parties and carefully perusing the materials placed on record, we are of the considered view that the appeals filed by the Revenue are to be decided against them and we support such conclusion with the following reasons. 18.The broad issues which would fall for consideration are whether the assessee Trust is a determinate Trust or indeterminate Trust. The Assessing Officer came to the conclusion that it is an indeterminate Trust, as the list of beneficiaries has not been specifically set out in the Deed of Trust. The other issue would be whether if in case, the beneficiaries are assessed for the income arising from the Trust and whether it is determinate or indeterminate can the trust be assessed once over again. The third issue would be whether merely because the names of the beneficiaries are not mentioned in the Trust Deed, but shown as 16/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 beneficiaries and are identifiable and having been assessed whether the Trust can be assessed again. In fact, the Tribunal ought to have followed the decision of the Division Bench of this Court in the case of P.Sekhar Trust (supra). However, the same has been distinguished by the Tribunal in the case of TVS Investments I Fund by observing that the said judgment is not applicable to the facts of the case because in it, the beneficiaries are incorporated on the day of the institution of the Trust Deed and moreover, they did not receive any income in that year. Unfortunately, the Tribunal in the case of TVS Investments I Fund, did not fully appreciate the finding rendered by the Hon'ble Division Bench of this Court and post a wrong question, which led to a wrong answer. For better appreciation, we quote the relevant paragraphs of the judgment in P.Sekhar Trust (supra) hereunder:- “11. Section 5 of the Act deals with the scope of the total income of any previous year of residents and non residents. Section 4 of the Act deals with the charge of income tax in respect of total income of the previous year of every person 'subject to the provisions of this Act'. Chapter XV of the Act deals with the liability in special cases. Representative assessees are dealt in Section 160 of the Act. Section 17/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 160(1)(iv) of the Act provides that in respect of income which a trustee appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise (including any wakf deed, which is valid under the Musalman Wakf Validity Act, 1913 (6 of 1913) receives or is entitled to receive on behalf of or for the benefit of any person such trustee or trustees will be representative assessee. Section 161 provides for the extent of the liability of the representative assessee to the effect that every representative assessee as regards the income in respect of which he is a representative assessee, shall be subject to the same duties, responsibilities and liabilities as if the income received by or accruing to or in favour of him beneficially, and shall be liable to assessment in his own name in respect of that income; but any such assessment shall be deemed to be made upon him in his representative capacity only, and the tax shall, subject to the other provisions contained in Chapter XV, be levied upon and recovered from him in like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him. 12. ................ 13. ................ 14. ................ 15. ................ 18/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 16.. Thus, the scheme of the Act, the statutory provisions, as well as the line of judgments referred to above clearly state that though Section 5 referred to total income of the person whose income is being assessed and the charge on income tax under Section 4 of the Act is on the total income, what could be taxed in the hands of the representative assessee is only the income which the beneficiaries could be said to have received or to be deemed to have received in India or in whose favour the income has accrued or arises or is deemed to accrue or arise to him in India; or accrues or arises to him outside India during the relevant year. Though the Trust may receive the income, the extent to which the same can be taxed is to the extent to which tax would leviable and recoverable from the beneficiaries. Section 161 of the Act specifically provides that the tax to be levied on the representative assessee and to be recovered from him is to be 'in the like manner and to the same extent as it would be leviable upon and recoverable from the person represented by him.' (emphasis supplied) 17. Section 164 of the Act gets attracts only when the shares of the beneficiaries are unknown, which is manifest from the marginal heading of that Section itself, viz., Charge of tax where the share of the beneficiaries unknown. That Section 19/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 comes into play only where any income or any part thereof is not specifically receivable on behalf of or for the benefit of any one person or where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown, and in such case, the relevant income, or part of the relevant income shall be charged at the maximum marginal rate. 18. From this, it is clear that in order to attract Section 164(1) of the Act, the beneficiaries on whose benefit, such income or such part thereof is receivable are indeterminate and unknown.” 19.The legal position qua the applicability of provisions of Section 14(1) of the Act has been thoroughly examined by the Tribunal and by an elaborate order, the Tribunal has held in favour of the assessee. We find that the Tribunal rightly took note of the statutory provisions and the law governing this subject and arrived at a conclusion. The view taken by the Bangalore Bench of the Tribunal was affirmed by the High Court of Karnataka on the following terms:- “6. As such, in our view the matter should rest as the finding of fact for the simple reason that whether the Trust Deed provides for shares of the beneficiaries which are 20/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 determinable or non-determinable would vary from facts to facts of each Trust including that of the deed of trust etc. Such finding of fact can be arrived at after interpretation of the terms and conditions of the Trust Deed as well as the other facts and circumstances which may be germane to reach the conclusion on the finding of fact. If the matter is to rest on the question of finding of fact, in our view, such question of finding of fact would be outside the scope of judicial review in the present appeals which would be limited to substantial questions of law. 7. ............. 8. ............. 9. ............. 10. In our view, the contention is wholly misconceived for three reasons. One is that by no interpretative process the explanation to Section 164 of the Act, which is pressed in service can be read for determinability of the shares of the beneficiary with the quantum on the date when the Trust deed is executed and the second reason is that the real test is the determinability of the shares of the beneficiary and is not dependent upon the date on which the trust deed was executed if one is to connect the same with the quantum. The real test is whether shares are determinable even when even or after the Trust is formed or may be in future 21/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 when the Trust is in existence. In the facts of the present case, even the assessing authority found that the beneficiaries are to share the benefit as per their investment made or to say in other words, in proportion to the investment made. Once the benefits are to be shared by the beneficiaries in proportion to the investment made, any person with reasonable prudence would reach to the conclusion that the shares are determinable. Once the shares are determinable amongst the beneficiaries, it would meet with the requirement of the law, to come out from the applicability of Section 164 of the Act. 11. Under the circumstances, we cannot accept the contention of the Revenue that the shares were non- determinable or the view taken by the Tribunal is perverse. On the contrary, we do find that the view taken by the Tribunal is correct and would not call for interference so far as determinability of the shares of the beneficiaries are concerned. 12. Once the shares of the beneficiaries are found to be determinable, the income is to be taxed of that respective sharer or the beneficiaries in the hands of the beneficiary and not in the hands of the Trustees which has already been shown in the present case. 22/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 13. Under the circumstances, in any case, it cannot be said that the Tribunal has committed error. Accordingly, the question is answered in affirmative against the Revenue and in favour of the assessee.” 20.Thus, in the light of the above, the substantial questions of law framed for consideration in these appeals are required to be answered against the appellant/Revenue. 21.Insofar as T.C.A.Nos.569 and 570 of 2019 are concerned, substantial question of law Nos.1 and 2 relate to the jurisdiction of the Tribunal. Since we have held the substantial questions of law framed for consideration in the other appeals against the Revenue and also held substantial question of law Nos.3 and 4 in the instant case against the appellant/Revenue, we find that substantial question of law Nos.1 and 2 regarding the jurisdiction of the Tribunal under Section 254(2) of the Act has become academic and there would not be a necessity to decide the said questions in these appeals. Accordingly, those two questions are left open. 23/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 22.With regard to T.C.A.Nos.735 and 736 of 2018, the appeals arose out of orders of penalty passed under Section 271(1)(c) of the Act for the assessment years 2009-10 and 2010-11. We have perused the penalty orders dated 18.05.2016 and 19.05.2016 respectively. The penalty was levied on the ground that the assessee has furnished inaccurate particulars. The orders stem out of the assessment orders in which the Assessing Officer held that the assessee is an indeterminate Trust. This issue has been answered in favour of the assessee by the Tribunal which order we have upheld in the preceding paragraphs. Taking note of the order passed by the Tribunal in the substantive appeals, the Tribunal in the instant appeals held that no penalty could have been levied and, affirmed the order passed by the CIT(A), which set aside the order of penalty. 23.We find no error in the order passed by the Tribunal and in fact, no substantial question of law would arise for consideration in these appeals, as the substantive appeal, based on which the penalty show cause notice was issued, has gone, as the legal issue has been decided in favour of the respondent/assessee. 24/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 24.Accordingly, T.C.A.Nos.735 and 736 of 2018 are also dismissed holding that no substantial question of law arise for consideration. 25.For the above reasons, all these appeals stand dismissed. No costs. (T.S.S., J.) (V.B.S., J.) 28.09.2020 Index : Yes/No Speaking/Non-Speaking Order abr To 1.The Income Tax Appellate Tribunal 'B' Bench, Chennai. 2.The Income Tax Appellate Tribunal 'C' Bench, Chennai. 25/26 http://www.judis.nic.in T.C.A.Nos.735, 736, 890 & 916 of 2018 & 473, 474, 480, 481, 569 & 570 of 2019 T.S.Sivagnanam, J. and V.Bhavani Subbaroyan, J. (abr) T.C.A.Nos.735, 736, 890 & 916 of 2018, 473, 474, 480, 481, 569 & 570 of 2019 28.09.2020 26/26 http://www.judis.nic.in