COMMISSIONER OF WEALTH TAX Vs. PUGALAGIRI V

JUDGEMENT

(1.) IN these tax case petitions under section 27(3) of the Wealth-tax Act, 1957, the Revenue seeks a direction to the Tribunal to refer the following common question of law for the opinion of this court :

(2.) UNDER the will dated September 16, 1970, of the father of the assessee, his mother had a life interest in certain properties and while computing the value of the interest of the remainderman, viz., the assessee, he took the stand that the value of the remainderman's interest should be arrived at a discounted value after taking into account the mortality of the life interest holder and also the present discounted value of the death benefit. While the assessing authority did not accept this, the appellate authority, applying the observations of the Supreme Court in CWT v. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust [1977] 108 ITR 555, upheld the method of valuation of the interest of the remainderman as put forward by the assessee. The Tribunal also accepted the valuation so made. We have carefully considered the order of the Tribunal and we find that the course adopted by the appellate authority as well as by the Tribunal, in the absence of specific rules in regard to the valuation of the interest of the remainderman, is quite correct and is also fully supported by the observation of the Supreme Court in the decision referred to earlier. It has been pointed out by the Supreme Court that the value of the remainderman would be the present value of his right to receive the corpus of the property at an uncertain future date and such valuation should be done on an actuarial basis and that taking the future value of the asset to be received at a later date, its present value had to be discounted. That precisely had been done by the appellate authority and was also upheld by the Tribunal. Ultimately, the whole question revolves round the method of the valuation to be adopted, in the absence of any specific rule in that regard. We are, therefore, of the view that no referable question of law as such can be said to arise out of the order of the Tribunal. These tax case petitions are dismissed. No costs.