TANIL RAMDAS Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE assessee, Tanil Ramdas, is the son of Ramdas Kilachand, who by a duly executed trust deed dt. 31st March, 1960, created a trust in respect of 130 shares in Kesar Corporation (P) Ltd., each of the face value of Rs. 1,000. The sales were fully paid up. Under cl. 1 of the trust deed, the trustees were to accumulate the income from the trust fund after discharging the necessary liabilities in the form of taxes, costs, charges and expenses in connection with the management and administration of the trust. Clause 2 of the trust deed, on the construction of which the decision of this reference depends, read as follows :

(2.) THE WTO in the assessment proceedings for the asst. yrs. 1960 61, 1961 62 and 1962 63 held that the assessee had beneficial interest in the corpus of the trusts and the value thereof was liable to be included in the net wealth of the assessee in respect of the assessment years in question. He, therefore, valued the said beneficial interest of the assessee and included it in his net wealth.

(3.) IN the appeal before the Tribunal, the Tribunal found that the trust deeds created a contingent interest and not "a beneficial interest in possession in the corpus and accretion thereto" in favour of the assessee. The Tribunal took the view that the trustees were to transfer and hand over the corpus of the trust fund, including the accretion thereto, to the assessee absolutely if he was alive on the expiry of the tenth year from the date of the execution of each of the trust deeds. It appears that it was contended before the Tribunal that contingent interest could not be property, and, therefore, not an asset within the meaning of S. 2(e) of the WT Act. The Tribunal rejected this contention holding that a contingent interest being property was included in the definition of "asset"' and, therefore, chargeable under S. 3 of the Act. Arising out of this finding recorded by the Tribunal, the following three questions have been referred to this Court under S. 27(1) of the WT Act, at the instance of the assessee :