COMMISSIONER OF WEALTH TAX Vs. SARDAR SURJIT SINGH

JUDGEMENT

(1.) In this reference under Section 27(3) of the W.T. Act, 1957, as directed by this court, the following three questions have been referred to this court :

(2.) In order to appreciate the questions it will be necessary to refer to certain facts. The assessment year involved is 1959-60, with its date of valuation being 31st March, 1959. The assessee, Sardar Surjit Singh, had 850 shares in M/s, Indra Singh & Sons Pvt. Ltd. He transferred 50 shares to Smt. Baljit Kaur by a deed executed on the 10th January, 1959, and 300 shares to Sardar Baldev Singh Charitable Trust on the 27th February, 1959. By means of a letter dated 20th January, 1959, the assessee wrote to the trustees of the trust that as discussed with them about his decision to set up a public charitable trust and/or a public religious trust and in view of their kind acceptance of the office of trustees to the trust, he was anxious to execute the transfer of sufficient amount of security to the trust and offered "immediate transfer to you and delivery of possession to you of 300 fully paid up equity shares of Rs. 1,000 each at par in the share capital of M/s. Indra Singh & Sons Pvt. Ltd." He requested the trustees to consider his request and offer and communicate to him the result of the decision as soon as possible. The trustees held a meeting on the 6th of February, 1959, and accepted the said offer. The trustees communicated the result of the meeting to the assessee on the 9th February, 1959, and the assessee wrote back to them on 10th of February, 1959, that he was anxious to give effect to his desire and the decision to set up a public charitable and/or religious trust as well as to transfer the 300 shares that he had offered to them and also tendered the 3 separate instruments of transfer, each of 100 shares, together with the corresponding certificates of shares in original and requested the trustees to accept the offer and tender. The trustees received this letter and three instruments of transfer duly stamped, signed and witnessed, for the transfer of 300 fully paid-up equity shares in the share capital of the company for the purpose of and for and on behalf of the trust of which they had agreed with the assessee to serve as trustees. A meeting of the trustees was held on 27th February, 1959, for the consideration of the transfer of the shares and the transfer was approved. The deed of declaration of the trust was, however, executed on 8th of July, 1959.

(3.) Our attention was drawn to a copy of the said deed of trust which, inter alia, provided as follows :