Grover, J. - (1.) These appeals by certificate from a judgment of the Calcutta High Court involve a common but important question namely whether the right of an assessee to receive a specified share of the net income from an estate in respect of which Wakf-alal-aulad has been created is an asset assessable to Wealth Tax.
(2.) By a deed dated November 19, 1928 as modified by a deed of rectification dated July 5, 1930 one Golam Hossain Casim Ariff, a muslim, governed by the Hanafi School of the Mohammadan Law created a wakf in respect of his properties in Noormul Lohia Lane and Armenian Street in Calcutta. The settlor appointed himself as the sole Mutwalli for the term of his life and provided that after his death his widow Aisha Bibi and his sons would act as Mutwallis jointly. The settlor died on January 1, 1937. He left behind his widow Aisha Bibi and three sons who are the appellants before this court. The wakf created was of the nature of Wakf-alal-aulad for the benefit of the settler's wife, children and their descendants. The extent of the benefit conferred on them would appear from clause 5 of the deed of wakf as modified: "5. After payment of all necessary outgoing such as establishment charges, collection charges, revenue taxes, costs of repairs, law charges and other expenses for the upkeep and management of the said Wakf property, the Mutwalli or Mutwallis shall apply the net income of the said Wakf property as follows, viz.: (a) In payment to me during the term of my life of one-fifth of the said net income by monthly instalments. (b) In payment to each of my sons during the respective terms of their lives one-sixth of the said net income by monthly instalments. (c) In payment to my wife Aisha Bibi during the term of her life onetenth of the said net income by monthly instalments. The moneys payable as aforesaid to such of my sons as are minors shall until they attain the age of majority be respectively invested (after defraying the expenses of their maintenance and educational in proper securities or in landed property in Calcutta and such securities or property shall be made over to the said sons on their respectively attaining the age of majority." The ultimate benefit in the case of complete intestacy of the descendants of the settlor was reserved for poor musalmans of Sunni community deserving help.
(3.) The appellants who are the beneficiaries under the deed of wakf were paying income-tax on the amount which was being received by them in terms of that deed from the Mutwalli. In the year 1957 the Wealth Tax Act, Act 27 of 1957, hereinafter called the Act, came into force. During the assessment years 1957-58 and 1958-59 the appellants were not only assessed to income tax in respect of the income received by them from the wakf estate but were also assessed to Wealth tax by the Wealth Tax Officer on the basis that they had a share in the wakf estate. The total value of the immoveable property belonging to the wakf estate was valued at 20 times the annual municipal valuation and 1/6 th of the value of the imoveable property along with other properties was taken to be the net wealth of each assessee. Appeals were taken to the Appellate Assistant Commissioner of Wealth Tax but these were dismissed. There were further appeals to the Income tax Appellate Tribunal where no dispute was raised as indeed it could not be raised. with regard to the validity of the deed of wakf. It was held that the right of the sons of the wakif to receive a share of the rents and profits of the wakf property was property or an interest in property and it was not limited in enjoyment to a period of six years it fell within the definition of the term "assets" as defined by S. 2 (e) of the Act. The contention of the appellants that the right of the beneficiaries under the deed of wakf was a mere right to an annuity as mentioned in S. 2 (e) (iv) and was, therefore, not an asset assessable to Wealth tax was rejected. The third argument which had been raised before the Tribunal that the allowances under assessment were payable to the beneficiaries by way of maintenance were not transferable under Section 6 (dd) of the Transfer of Property Act and therefore they had no market value for inclusion in the net wealth was also refuted. It was pointed out that the right to maintenance was not one of the assets mentioned in S. 5 which alone entitled an assessee to claim exemption in respect of certain assets. The Tribunal did not find it possible to hold on the facts of the case that the amounts in dispute were receivable by the beneficiaries as maintenance under the terms of the wakf. As regards the quantum of valuation a direction was made that the value of the assessee's life interest may be capitalised on the basis of the valuation table set out in Park's Principles and Practice of Valuations taking the rent security at 6 per cent.;