COMMISSIONER OF WEALTH-TAX Vs. NIRMALA D. MEHTA

JUDGEMENT

(1.) THIS Wealth Tax Reference under Section 27(1) of the Wealth Tax Act, 1957 poses a common question for eight assessment years 1965 -66 to 1972 -73. The question is as follows: Whether, on the facts and in the circumstances of the case, the sum of Rs. 35,000/ - for each of the six assessment years from 1965 -66 to 1970 -71 and the sum of Rs. 25,000/ - for each of the assessment years 1971 -72 and 1972 -73, which the assessee was entitled to demand and receive from the trusts/trust to be paid to her out of the corpus of the trust funds, was includible in her net wealth on the relevant valuation date?

(2.) THE assessee, who is the respondent, is an individual. She is a beneficiary under two trusts the first made by the assessee herself dated April 23rd, 1949 and the second made by Shri Manmohandas Madhavadas Amersey and dated December 24th, 1953. Under Clause 2 of the first deed of trust, which is dated April 23rd, 1949 it was provided as follows:.the Trustees shall pay to the Settlor on a written demand being made by the settlor out of the corpus of the Trust Fund a sum not exceeding Rs. 25,000 (twenty five thousand) in all either in one lumpsum at one time or in different sums at different times and the receipt of the Settlor shall be a complete discharge to the Trustees.

(3.) UNDER these two trusts, therefore, the assessee has a right to claim from the corpus of the first trust fund a total sum of Rs. 25,000/ -; and from the corpus of the second trust fund, she has a right to claim a total sum of Rs. 10,000/ -. She also has a life interest in both these trusts. During the assessment years 1965 -66 to 1970 -71 the assessee did not exercise this right of claiming Rs. 25,000/ - and Rs. 10,000/ - at all. On February 3, 1970 she exercised her right in respect of the second trust and received from the corpus of the second trust the full sum of Rs. 10,000/ -. This amount was invested by her in M/s Amersey and Sons. It was included by her in her total wealth for the assessment year 1971 -72 and 1972 -73 and was duly brought to tax.