Law:

Section:

Section 7 of the Wealth-tax Act, 1957 - Valuation of asset - Life interest - Assessee under a trust settled certain properties and income therefrom for maintenance of himself and his wife - Assessee's case was that since his interest under trust was personal estate, it had no value for purposes of Act - Whether even if property in question was incapable of being sold in open market, being a personal estate, in that event also interest of assessee had to be valued by Wealth-tax Officer - Held, yes FACTS The assessee under a trust deed settled certain properties in trust. The trust deed, inter alia, provided to apply the balance of such interest, dividends, profits and income of the trust fund for the support, maintenance and advancement in life and otherwise for the benefit of the settlor and his wife in such manner, as to enable the settlor to live as far as possible with the same comforts and to enjoy life in the same manner as he was accustomed to do and in case, of any surplus income at the end of any year to accumulate the same for a period of eighteen years from the date hereof, and, to add the same to the corpus of the trust fund and after the expiration of the said period of eighteen years in case of any surplus income at the end of any year to hand over the same to the settlor. The Tribunal held that the estate conferred under the trust was a personal estate, that the same was incapable of being sold in the open market and, therefore, the estate had no value. The High Court differing from the view taken by the Tribunal, came to the conclusion that even though the estate conferred was a personal estate and it was not possible to sell that estate in an open market yet, under the law the same had to be valued on the basis of the principles enunciated in the Act. On appeal to Supreme Court : HELD Even if the property in question was incapable of being sold in the open market, being a personal estate, in that event also the interest of the assessee had to be valued by the WTO. Note : Decision in favour of the revenue. CASE REVIEW : Decision of the Bombay High Court in Commissioner of Wealth-tax v. Purshottam N. Amarsay [1969] 71 ITR 180 (Bom.), affirmed.…

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