COMMISSIONER OF WEALTH TAX Vs. BHAVANI DEVI SADHAIYA

JUDGEMENT

(1.) AT the instance of the Department, the Tribunal referred the following question No. 1 for the asst. yrs. 1976-77 and 1977-78 with regard to Tax Case Nos. 301 and 302 of 1984 and question No. 2 for the asst. yr. 1978-79 with regard to Tax Case No. 825 of 1984 for the opinion of this Court under s. 27 (1) of the WT Act, 1957 (hereinafter referred to as the Act) : Question No. 1 : "whether, on the facts and in the circumstances of the case, the value of the assets settled by assessee for the deferred benefit of her son's minor son under a trust deed, dt. 29th March, 1974 could be included in the net wealth of assessee either under s. 4 (1) (a) (i) or under s. 4 (1) (a) (v) of the WT Act "" Question No. 2 : Whether, on the facts and in the circumstances of the case and having regard to the provisions of s. 4 (1) (a) of the WT Act, the tribunal was right in deleting the inclusion of Rs. 41, 000 being the value of the property settled by the assessee on her grandson, as per deed, dt. 29th march, 1974 "

(2.) THE assessee is an individual. All the three Tax cases relate to the asst. yrs. 1976-77 to 1978-79. By a deed, dt. 29th March, 1974, she settled certain immovable properties being godowns in Calcutta for the benefit of her grandson, Darsan Kumar Sadhaiya, appointing her spouse Sri Nemichand sadhaiya as the trustee. THE deed provided that the trustee shall hold the properties on trust on condition that he shall accumulate the income and transfer the property to the beneficiaries, on his attaining the age of twenty one. In case of the death of the beneficiary, before attaining the age of twenty one, the properties were to be held for the benefit of the heirs of darsan Kumar Sadhiaya and transferred to them when they attain the age of majority.

(3.) ON consideration of the submissions made by the assessee as well as the Department, the Tribunal came to the conclusion that the assessee should succeed. According to the Tribunal, the property transferred by the grandmother in favour of the grandchild by creating a trust and appointing her spouse as the Trustee. . . . . such a transferred asset. . . . cannot be assessed in the hands of the assessee either under s. 4 (1) (a) (i) or under s. 4 (1) (a) (v) of the Act.