COMMISSIONER OF WEALTH TAX Vs. PURSHOTTAM N AMERSEY

JUDGEMENT

(1.) THE only question referred for our decision is :

(2.) THIS question has been framed in connection with the assessments to wealth -tax of two individuals who are brothers, Purshottam N. Amersey and Manoranjan N. Amersey, but at the hearing before the Tribunal and before us it was agreed that the facts and circumstances in the cases of both the assessees are the same and that the documents which fall to be considered in each case are also similar. Therefore, in the statement of the case reference has been made to the facts of only one case, that of the assessee, Purshottam, and we shall also for the purposes of the decision of this reference refer to the facts and circumstances of that case. Purshottam Amersey and his brother were partners along with others in M/s Amersey Damodar of Bombay. In that firm, Purshottam had to the credit of his account in the year 1949 a sum of Rs. 4,50,000 lying in deposit with the firm. On 8th Sept., 1949, he declared a trust of this amount. The amount was not made over to anyone but it appears that by a mere book entry the amount standing to the credit of Purshottam was held to the credit of the trust fund. Under the provisions of that trust, to which we shall presently advert, both the assessees were entitled to certain benefits which in the asst. yr. 1960 -61 the authorities under the WT Act sought to bring to tax in the hands of these two persons as individuals. Both these persons are otherwise, it appears, wealthy persons and own considerable property which has been taken into account towards the computation of their net wealth. So far as their beneficial interest arising out of the trust deed is concerned, having regard to the provisions of S. 21(2) of the WT Act, the interest can at the option of the Department be taxed as being the net wealth of the beneficiaries under the trust or it can be taxed in the hands of the trustees subject to the conditions prescribed in that section. The assessees have no objection to the amount of net wealth being taxed in the hands of the trustees, but the Department finds it advantageous to add it to the net wealth of the assessees as the beneficiaries under the trust fund and assess the assessees along with their other considerable wealth. That has given rise to the question which has been referred.

(3.) ,50,000 lying in deposit with the firm of M/s Amersey Damodar of Bombay. The first clause merely sets out that the trust is being declared out of natural love and affection which the settlor bears towards the members of his family and diverse other good causes and consideration. The second clause lays down the terms and conditions of the trust and is important for the purposes of the question referred. That clause provides as follows :