Law:

Section:

Section 5, read with section 21, of the Wealth-tax Act, 1957 - Exemptions - Position prior to 1-4-1993 - Assessment years 1957-58 to 1959-60 - Whether where benefit receivable by a beneficiary is in shape of an annuity or income from trust estate and it is possible to evaluate its capitalised value, share of interest of that bebeficiary is not indeterminate or unknown within meaning of section 21(4) and assessment in such a case has to be made under provisions of section 21(1) - Held, yes - Whether where religious endowment under trust was secular and fund assigned to it was indeterminate, exemption under section 5(1)(i) could not be allowed - Held, yes FACTS One 'C' created the assessee trust by settling certain cash and shares having three main objects in view. The first one was, that 15 per cent of the net income every year would be invested in securities and properties and allowed to be added to the endowed property. The second object was that 15 per cent of the net income would be spent on the worship, performance of ceremonies, festival and ritual of the family deity. The remainder of 70 per cent of the net income was to be spent for the benefit of the members of the family of the author, 10 per cent going out as allowances to relatives and dependants named by the author and 60 per cent to the sons of the author and their family. The author of the trust casted a duty on the trustees to apply 60 per cent of the net income of the trust property in accordance with the directions given in sub-clauses (a) and (b) of clause (5). One-fourth of the 60 per cent, that is, 15 per cent of the net income was to be divided equally amongst the five sons of the author euphemistically described as sebayets. It was to be called 'A' allowance. The remaining 3/4th, that was 45 per cent of the net income, was again to be divided equally into five equal portions and paid to the five sons for the maintenance of their respective families. This was to be called 'B' allowance. For the assessment years 1957-58 to 1959-60, the WTO assessed the trust in the status of an individual and computed the value of the net wealth, holding that the trust being the legal owner of the assets was…

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