Per Kalsian, A.M. - This appeal by the Department relates to assessment year 1985-86 and arises out of the order of the CIT(Appeals)-III, Madras dated 15-3-1989. The following grounds are raised in this appeal :

"1.The order of the CIT(Appeals) is contrary to law and facts of the case.

2. The CIT(Appeals) has erred in holding that no assessment should be made in the hands of the trust.

2.1 The CIT(Appeals) has failed to appreciate that the trustees have carried on business on behalf of the beneficiaries and the latter have acquiesced to the sharing of income.

2.2 The CIT(Appeals) has failed to appreciate that by virtue of mandatory accountability to the beneficiaries, the trustees are to be assessed in fiduciary capacity on representing the association of persons (Trust).

2.3 The CIT(Appeals) has failed to appreciate that the ratio of the decision of the Supreme Court in the case of N.V. Shanmugam clearly applies to the assessee’s case.

2.4 The CIT(Appeals) has failed to appreciate that by an implied mandate the trustees carry on the business on behalf of the beneficiaries, which is collectively an association of persons involved in the conduct/earning of income for the trust, viz-a