The assessee filed its return of income in India, disclosing therein income that fell within the scope of section 5(2) of the Act but in view of the exemption available in terms of the DTAA, reported nil taxable income. The assessee did not have any permanent establishment or fixed place of business or any other form of presence in India and did not have any business connection or operations in India. According to the assessee income derived from making investment and debt securities in India was not assessable to tax in India having regard to the provisions of article 24 of the DTAA read with sections 61 and 161 of the Act. The assessee applied to the Authority for Advance Rulings constituted under section 245-O to give a ruling on the question. The Authority held that : (a) the trust was registered in Jersey and there was no treaty between India and Jersey, (b) sections 61 and 63 of the Act would apply only to those trusts which fell under the Indian Trusts Act, 1882 and as the trust did not meet the definition, characteristics and features of trust as per Indian law, (c) India had not ratified the Hague trust convention of July 1, 1985 and hence trust laws of foreign jurisdictions were not applicable in India, (d) the settlor could not be the sole beneficiary, (e) sections 60 to 64 were designed to over take and circumvent the counter design by a taxpayer to reduce its tax liability by parting with its property in such a way that the income would no longer be received by him but at the same time he retained certain powers over the property or income, (f) though section 160(1)(i) or (iv) provides that a trustee can be a representative assessee, in this case the trustee being a resident of Jersey could not be an agent of the assessee, (g) no authority or material had been placed before the Authority to suggest that the provisions of section 161 would be applicable to a foreign trust or trustee, (h) the assessee’s representative could not satisfactorily answer the query as to why the assessee would like to route its investment in non-convertible debenture funds through Jersey route for investment in Indian market and the assessee itself being a registered foreign institutional investor could have directly invested in Indian portfolios and taken advantage of article 24 of the DTAA, (i) as the assessee was receiving income through a device and not from direct or immediate receipt the income received from Indian debt investment was not derived by the assessee and did not fall under article 24 of the DTAA, (j) there was a proposed amendment (it has come into effect only from April 1, 2021) which supported the view that if an entity is a resident of the U. A. E. and through this entity the assessee was in receipt of some income then the income would be exempted from tax under section 10 of the Act and the proposed amendment suggested that indirect accrual of income is not eligible for treaty benefit. On writ allowing the petition the Court held that  ;  (a) income earned through the assessee’s investment in the Indian debt portfolios directly would have been exempted under article 24 of the DTAA ; (b) the assessee was registered as a foreign institutional investor and later foreign portfolio investor with the SEBI ; (c) the deed of settlement with ETL regarding the trust ; (d) the assessee had made a capital commitment of USD 200 million in the trust in the capacity of the settlor of the trust, ETL was the trustee of the trust and the assessee was also the sole beneficiary of the trust ; (e) the trust was registered as a foreign portfolio investor with the SEBI. Section 61 of the Act provides that any income arising to any person by virtue of a revocable transfer shall be chargeable to tax as the income of the transferor. The deed of settlement and particularly clauses from the deed of settlement showed that there was a revocable transfer by the settlor, i. e, the assessee to the trustee ETL, and as such any income arising to the trustee should be chargeable in the hands of the assessee. The word trust in section 63 covers all trusts within its ambit. The Hague trust convention does not decide the issue one way or the other. There was nothing to even suggest in the ruling of the Authority how the ratification of Hague trust convention would affect the status of foreign trusts in India. Even a foreign trust is a trust under the Act and the Income-tax return form prescribed under the Act requires the details of the trust created under the laws of a country outside India. The trust created in terms of the deed of settlement was consistent with the requirements of both, the Indian Trusts Act as well as Trust (Jersey) Law, 1984 as to what constitutes a trust. The Act does not make any provision that the settlor cannot be a sole beneficiary. Secondly, there is no provision under the Indian Trusts Act which debars the settlor from being beneficiary. In the present instance, the settlor was not the trustee but was the sole beneficiary which was clearly permissible. If the assessee had invested the amount directly, the income derived from such investment would be exempted under article 24 of the DTAA. The assessee had not created the trust to avoid tax. The assessee had routed its investment in certain instruments through the trust only for commercial expediency. This assessee had explained in detail to the Authority why it had routed its investment in non-convertible debentures through the Jersey route for the India market. The Act does not provide anywhere that only a trustee who is resident of India can be an agent under section 160 of the Act. Even if the trust were based out of Jersey and the trust was settled in Jersey, the assessee being the settlor and sole beneficiary of the trust and resident of the U. A. E. in terms of article 24 of the DTAA, the income which arose to it by virtue of investment in Indian portfolio companies would be governed by the beneficial provisions of the DTAA. To take it further, even if the trust structure were to be discarded, it must necessarily follow that the investment must be regarded as having been made by the assessee and hence the income would arise in the hands of the assessee, and such income would not be taxable in India by virtue of provisions of the DTAA. There was no attempt whatsoever to reduce the tax liability by using the trust structure. When the provisions of the trust deed provided that the assessee had the right to reassume power over the entire income arising on the investments made by the trust in the portfolio companies, the entire income arising therefrom had in terms of section 61 of the Act to be assessed in the hands of the assessee. This would mean the exemption under article 24 of the DTAA would be attracted. Even if the income is taxed in the hands of the trustee in terms of section 161(1), it will be taxed in the “like manner and to the same extent” as the beneficiary. Once again, the assessee was the sole beneficiary of the trust and income assessed in the hands of the trustee would take colour of the assessee’s income and thereby, the benefit of the DTAA must be granted. The assessee could reassume the power and hence the contribution to the trust was a revocable transfer thereby making the income arising to the trust taxable in the hands of the assessee which was exempt under article 24 of the DTAA. In the circumstances the ruling dated March 18, 2020 had to be quashed. The income that accrued to the trust would not be chargeable to tax in India either by virtue of application of section 61 read with section 63 or section 161 of the Act conjointly with the provisions of article 24 of the DTAA. Since the ruling was quashed the steps taken in furtherance of the Ruling order passed therein were also quashed and set aside.