CHANDULAL SHIVLAL Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS reference relates to the asst. year 1958 59 and the relevant date of valuation is the 31st of March, 1958. The question referred to us in this reference is whether, on the facts and circumstances of the case, the inclusion of the sum of Rs. 11,59,137 in the wealth tax assessment of the assessee by applying S. 4(1)(a)(iii) is right in law.

(2.) THE assessee had two sons, Gunwant and Chaitanya. By a deed of trust dt. 12th Feb., 1957, he transferred certain properties of the value of Rs. 30,13,875 to the three trustees appointed by him therein to hold the same upon trust therein set out. After reciting the various properties situate in Ahmedabad and Bombay, which are the subject matter of the deed of trust, the deed, inter alia, recites as follows :

(3.) THE WTO, by his order dt. 31st of March, 1959, held that the properties covered by the deed of trust were undervalued by the assessee, and valuing them at Rs. 30,13,875, assessed the net wealth of the assessee at Rs. 35,30,932, ignoring altogether the deed of trust, holding that there was no transfer thereunder of any of the said properties. Contesting the inclusion of these properties in his net wealth, the assessee filed an appeal before the Asstt. Commissioner The Asstt. Commissioner allowed the appeal, directing that these properties should not be included in the computation of the assessee's net wealth. The Asstt. Commissioner took the view that as the sub Registrar had not objected to the registration of the trust as also the registration of the immovable properties referred to therein, the properties, on the date on which the trust deed was registered, became the properties of the trust and the assessee, therefore, did not have any right over those properties. He held that as the WTO had not found any difficulties in the trust deed and since the provisions of the Transfer of Property Act as also the Registration Act had been correctly followed by the assessee, the properties which were the subject matter of the deed of trust could not be the properties of the assessee and, therefore, should not be assessed in the hands of the assessee. In this view, he directed that the addition of those properties in the net wealth of the assessee should be deleted.