JUDGEMENT
Per Shri K.R.Dixit, Judicial Member - In all these appeals the grounds are the same, arising out of the same facts and, therefore, they are disposed of by this common order. -
(1.)
(2.)The question is whether the assessee-trusts are to be taxed at the rates specified under section 21(1) or under section 21(4). This means that we have to decide the question whether the shares of the beneficiaries are specific or are indeterminate. The WTO has considered this question in detail for the assessment year 1974-75 and for the other years he has followed that order.
The settlor settled upon trust certain properties for the benefit of her daughter-in-law and the children. Under clauses 6 and 7 of the trust deed the trustees were empowered to distribute the net income equally between the beneficiaries. There are other details regarding the distribution of this income, providing for various possibilities but they are not material for out purpose. Under clause 16 of that deed the trustees were to distribute the corpus of the trust according to the shares for distribution of the income. The date of distribution of the corpus was the date on which the child which would be born after the date of the trust deed attained the age of 18 years or 25 years after that date of the trust deed whichever was earlier. We are not concerned with the other provisions contained in this clause. However, under clause 15 thereof the trustees were empowered to distribute any part of the corpus of the trust among the said beneficiaries for the purpose of education or for medical treatment or any other purposes as they considered proper. The WTO has laid emphasis on these two clauses 15 and 16 and observed as follows :- "None of the beneficiaries has any right to compel the trustees to distribute assets on any date prior to the date of specified in clause 16. The shares of the beneficiaries as on the valuation date for the assessment year under consideration are, therefore indeterminate and unknown. Moreover clause 15 empowers trustees to give appropriate assets at their discretion to any of the beneficiaries for the reasons specified in the said clause. I, therefore, hold that the shares of beneficiaries are indeterminate and unknown, so far as distribution of wealth is concerned as on each valuation date."
(3.)IT was argued before him that clause (ii) of the proviso to section 21(4) was applicable in the assessees case. That clause, inter alia, provides that wealth-tax is to be charged at rates specified in Part I of Schedule I if the trust was created bona fide exclusively for the benefit of the relatives of the settlor mainly dependent on the settlor for their support and maintenance. The WTO rejected this contention on the ground that the daughter-in-law could not be said to be mainly dependent upon the mother-in-law and the grandchildren could not be assumed to be mainly dependent on the grandmother unless cogent evidence was produced. Since the assessee had failed to produce that evidence he held that the said provision was not applicable.
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