COMMISSIONER OF WEALTH TAX Vs. ABHEMAL SHAH

JUDGEMENT

(1.) THE Tribunal, Jaipur Bench, Jaipur, has referred the following question of law arising out of its order dt. 27th May, 1981, in respect of the year 1977 -78 :

(2.) THE brief facts of the case are that the assessee -HUF had deposited a sum of Rs. 2,40,000 with Messrs Shah & Co. In respect of the amount a partial partition which has taken place as a result of which Rs. 1,80,000 were divided amongst the karta and his two sons and the remaining Rs. 60,000 was set apart for the purpose of education and marriage of the daughters of the karta. This amount of Rs. 60,000 was credited in the accounts of the three daughters in the books of account of Shah & Co. According to the WTO, the amount of Rs. 60,000 having been credited in the accounts of the three daughters in the books of Shah & Co., the assessee had control over the funds and, therefore, it was held by the WTO that no trust was created in respect of the amount of Rs. 60,000 transferred in the names of the three daughters. The WTO included the sum of Rs. 60,000 in the net wealth of the assessee itself.

(3.) IN the appeal before the Tribunal it was held that the partial partition was recognised by the Department and there was transfer of funds to the individual accounts of the daughters of the karta and interest on these deposits were credited in these accounts and it had not been clubbed by the ITO with the income of the HUF in the income -tax assessment order. In these circumstances, the Tribunal held that it was difficult to believe that the assessee -HUF continued to have control over these funds. The Tribunal came to the conclusion that these amounts could not be included in the net wealth of the HUF.