COMMISSIONER OF WEALTH TAX Vs. HIRJI COWASJI JEHANGIR

JUDGEMENT

(1.) The question which has been referred to this court under s. 27(1) of the W.T.Act (hereinafter referred to as 'the Act') at the instance of the revenue is as follow : 'Whether the terms and conditions of the grant dated 23rd October, 1867, precluded the commutation of the right to annuity of Rs. 50,000 or any portion thereof into a lump sum gran ?'

(2.) IN order to properly appreciate the question required to be answered in this reference ,it is necessary to refer to certain events which preceded the assignment of the annuity in favour of the present assessee by the registered document dated 25th February,1954.

(3.) IN 1911, an Act called the Cowasjee Jehangir Baronetcy Act, 1911, come to be passed by the Governor -General of India in Council. The object of the Act was to settle the annuity of Rs. 50,000 payable by the secretary of State in Council for India in perpetuity being of the value of Rs. 15 lakhs and certain securities of the nominal value of Rs. 10 lakhs and producing a further annual income of about Rs.40,000 and two mansion houses called Readymoney House and Fort Mansion in the island of Bombay 'so as to accompany and support the title and dignity of a Baronet' lately conferred on Sir Cowasjee Jehangir Baronet by his late His Majesty King Edward VII. The concluding portion of the preamble of the said Act recited that 'the said Sir Cowasjee Jehangir is desirous of settling the said annuity and the said securities and the said mansion -houses and hereditaments so as aforesaid agreed to be settled by him for the purpose of supporting the dignity of the said Baronetcy, to the uses, upon the trusts and for the purposes hereinafter limited and declared, concerning the same respectively'. Under the Act a corporation with perpetual succession and common seal under the style and title of ' The Trustees of the Sir Cowasjee Jehangir Baronetcy ' was created for executing the powers and purposes of the Act. Under s. 4 of the Act the annuity of Rs.50,000 and the securities of the nominal value of Rs. 10 lakhs referred to earlier stood assigned and transferred into the name of the Corporation who were to hold the same upon the trusts and for the purposes expressed in the Act for the benefit of sir Cowasjee Jehangir or the person who as heir male of his body shall for the time being have succeeded to and be in the enjoyment of the title of Baronetcy conferred by the Letters Patent of King Edward VII notwithstanding any rule of law or equity to the contrary