COMMISSIONER OF WEALTH TAX GUJARAT II AHMEDABAD Vs. ARVIND NAROTTAM INDIVIDUAL

JUDGEMENT

(1.) These appeals by certificate granted by the Gujarat High Court are directed against the judgment of the High Court disposing of three Wealth-tax References.

(2.) The three trust deeds were executed by the Settlor Narottam Lalbhai for the benefit of the assessee, his wife and his children and grand children. The deed dated March, 19, 1955 created a trust known as the Arvind Narottam Trust. The deed dated April 9, 1955 created a trust called the Arvind Family Trust. And the deed dated March 18, 1961 created a trust described as the Arvind Kalyan Trust. All the three trust deeds are couched, in identical terms, except in regard to the minimum amounts payable to the beneficiaries out of the income of each year There was one further difference in detail. The first two deeds specified a period of 18 years from the date of execution as the period: during which the net income could be distributed to the assessee, his wife and children, while the third specified a period of 30 years. The minimum annual payments to be made under the three trust deeds to the assessee by way of maintenance were Rs. 250/-, Rs. 150 and Rs. 250/- respectively. Under each of the trust deeds the settlor specified the interest of the beneficiaries in the trusts. The pertinent terms of one of them, the Arvind Narottam Trust Deed, may be set forth here. Clauses 7 and 8 of that Trust Deed provide :

(3.) The Wealth-tax Officer made assessment orders for the assessment years 1962-63, 1963-64 and 1964-65 under the Wealth-tax Act, the relevant valuation dates being December, 31,1961, December 31,1962 and December 31, 1963. He assessed the assessee under sub-s. (2) of S. 21 of the Wealth-tax Act on the entire value of the assets held by the trusts. On appeal the Appellate Assistant Commissioner confined the liability of the assessee to wealth tax on the capitalised value of the minimum amounts payable under the trust deeds for his maintenance that is to say Rs. 250/-, Rs. 150/-and Rs. 250/- respectively per year. The Appellate Tribunal, on second appeal, affirmed the view taken by the Appellate Assistant Commissioner. At the instance of the Revenue, the three cases were carried in reference to the High Court for its opinion in each case on the following question of law :-