COMMISSIONER OF WEALTH TAX Vs. B N CHOWDHURY

JUDGEMENT

(1.) In this consolidated reference under Sections 27(1) and 27(3) of the Wealth-tax Act, 1957, the facts found and/or admitted are that the assessee executed a deed of trust on the 12th April, 1957, conveying properties to his brother, S. N. Chowdhury, to hold the same in trust for the benefit of the latter's wife and minor children. On the same day, S. N. Chowdhury also created a similar trust of assets and properties of similar value for the benefit of the assessee's wife and minor children and appointed the assessee as the trustee thereof.

(2.) The Wealth-tax Officer applying Section 4(1)(a) of the Wealth-tax Act, 1957, included in the net wealth of the assessee the value of assets transferred to the assessee's brother on trust as aforesaid. On appeal, the Appellate Assistant Commissioner sustained the decision of the Wealth-tax Officer in respect of the assessment years 1958-59 and 1959-60. In the subsequent assessment years 1960-61 and 1961-62, the Appellate Assistant Commissioner, however, held that Section 4(1)(a) of the Wealth-tax Act was not applicable.

(3.) Both the revenue and the assessee preferred further appeals before the Tribunal against the said order of the Appellate Assistant Commissioner. The Tribunal held that the assets transferred by the trust deed could not be included in computing the net wealth in the hands of the assessee under Sub-clause (iii) of Section 4(1)(a) of the Act, under which sub-clause alone, if at all the said trust properties could have been so included. All the appeals were decided in favour of the assessee. From this order of the Tribunal the following questions have been referred to us under Section 27(1) of the Wealth-tax Act. 1957 ;