The assessee-trust received donations from six of its group companies amounting to Rs. 25 crores which were credited to the balance-sheet of the assessee under the head addition to corpus and not routed through the profit and loss account. It filed its return in the status of an association of persons. The Assessing Officer treated the sum of Rs. 25 crores credited directly to the balance sheet as income from other sources and taxed the said receipt which was up held by the CIT(A) . On appeal the the Tribunal held that a discretionary trust could not be treated as an individual for all purposes of the Act especially when the term individual  was not defined under the Act. It held that the amount Rs. 25 crores received by the assessee could not be considered as income from other sources under section 56(2)(vii) read with section 2(24)(xv) of the Act and accordingly, deleted the addition.

On appeal by the Department the Court held that the settlor had created a trust and appointed trustees, to administer the trust for the benefit of certain identified beneficiaries who were top level executives of the S group of companies and who were admittedly individuals. Those individuals had not come together with a common purpose and they did not have any role in the operation or administration of the trust. Therefore, the assessee could not be treated as an association of persons. The Court also held that the trustees were only the representatives of the beneficiaries and the income was required to be taxed in the like manner and to the same extent as it would be in respect of beneficiaries. All the beneficiaries were individuals and therefore, the assessee in the instant case, having received the perquisite on behalf of its beneficiaries, should be treated as a representative of those beneficiaries and therefore, had to be assessed as an individual.  Court also held that Consequently, the contribution of Rs. 25 crores was to be assessed as income under section 56(1) under the head Income from other sources the donation was received by discretionary trust and not relative of individual.  (AY. 2014-15)