Per N.D. Raghavan - This is an appeal of the assessee challenging the order dated 16-1-1987 of the Commissioner of Income-tax (Appeals) as opposed to facts and law of the case.

2. The facts of the case are briefly these: The assessee, a resident having the status of Hindu undivided family and the accounting period ending with 3-11-1975 for the assessment year 1976-77 filed on 30-8-1976 its return showing an income of Rs. 20,500. The husband settled one-third part of bungalow No. 8, Prithvi Raj Road, New Delhi, by a Trust Deed dated 11-11-1974. executed between him as the settlor or the author of the Trust and the trustees being HUF consisting of himself and his wife, thereby. creating a Trust known as Mahavir Prasad Jaipuria Family Trust, for the benefit of the cestui qui trust, being the two sisters of the settlor, one sister-in-law of the settlor and three Private Limited Companies of which the Settlor is one of the shareholders and directors. In the preceding assessment year 1975-76 as the Assessing Officer opined that the Trust was not an irrevocable one, he referred the issues being vital to the inspecting Assistant Commissioner under section 144A for his guidance on the subject. The issues raised were two. The first was as to whether Shri Jaipuria, HUF, was entitled to dispose of the property of the HUF in the manner he liked even if there was one member in the HUF and that is his wife and also he is having married sisters. This issue was answered in affirmative by the inspecting Assistant Commissioner in favour of the assessee. On the next issue as to whether under section 63 of the Act, when the assessee has made three companies as beneficiary of which Shri Jaipuria, the karta of the HUF was one of the shareholders, he can be considered as deriving indirect benefit. The latter issue was answered in negative by the inspecting Assistant Commissioner thus going against the assessee. Both the issues were decided after affording opportunity to the assessee and assigning reasons in his order dated 23-3-1978 under section 144A of the Act. Accordingly, the Assessing Officer for the assessment year 1975-76, adopted his finding that the transfer should be deemed as revocable because the deed contained in their view the provision for re-transfer of whole or any part of income or asset to the transferee directly or indirectly. On appeal the Appellate Officer found that this finding did not result in any disputed addition of income or imposition of tax and consequently dismissed the same for the preceding assessment year 1975-76. For the succeeding assessment year of 1976-77 in question, the Assessing Officer observed that as he held earlier that the Trust was a revocable one wholly, the income of the property pro tanto has to be added to the total income of the assessee for this assessment year. Thus, the total income was ultimately computed at Rs. 20,642 in the assessment under section 143(3) of the Act for the year in question resulting thus in an addition of Rs. 4,277. On appeal, this was confirmed. Hence the instant second appeal by the assessee.

3. The learned Counsel for the assessee submitted that section 63(a) of the Act does not at all apply to the instant case, as the Trust created is an irrecoverable one. There is no power or right for the settlor to receive any income directly or Indirectly. Clauses 4 and 5 of the Deed may be seen. The former clause suggests clearly that this is a discretionary trust and not a specific Trust. the shares are being indeterminate and not specific. The IAC has erred in saying that the shares are determinate and specific. The relevant provisions of the Deed speaks for themselves that nothing comes back to the Settlor at all. Page 24 of the Paper Book may also be seen which is a suitable reply given to the IAC by the assessee. The status of HUF, Trust and company are absolutely separate, different and distinct legal entities under the Act. If re-transfer occurs it must be to the same enti