SHARDABEN JAYANTILAL MULJI Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS is a reference made at the instance of the assessee which relates to assessment years 1960 -61 and 1961 -62, the valuation dates being 31st March 1960, and 31st March 1961. The question that has been referred to us is as follows :

(2.) THE short facts necessary for the purposes of disposing of the reference are that the settlor created two trusts by entrusting certain shares to the trustees, in respect of which the trustees executed two declaration of trust, which are almost in identical terms, and are both dated the 30th March, 1960. Under the said declarations of trust, one of which related to the settlor's minor daughter, Bharati, and the other to the settlor's minor daughter, Arti, the trustees declared that they held the said shares upon trust to utilize the net income of the trust estate and all accumulations of income and profits or the corpus for providing food, clothing, residence, education, medical attendance and treatment and marriage expenses till each of the said minor daughters attained the age of 21 years; and on each of them attaining the age of 21 years, the entire trust estate, along with the accumulations and accretions thereto, were to be handed over to each of the said minor daughters absolutely. Clause (4) of the said declaration of trust, however, laid down that nothing contained therein was to confer upon any of the beneficiaries any vested interest in the trust till the date of distribution mentioned therein.

(3.) SECTION 4(1)(a)(iii) of the Wealth -tax Act, 1957, was, at the materials time in the following terms :