Law:

Section:

Section 21 of the Wealth-tax Act, 1957 - Trust/Trustees - Assessment when assets are held by them - Assessment years 1959-60 to 1964-65 - A trust was created for benefit of 'A' who was life tenant under said trust deed - 'A' was entitled to entire income of trust during her life time and on her death assets were to be divided amongst her male children - In individual wealth-tax assessment of 'A', capitalized value of her interest as life tenant were assessed and balance amount was assessed in hands of trustees in their representative capacity - Tribunal held that trust could be assessed only to extent of value of interest of remainderman - Accordingly, Tribunal appointed valuers under section 21(6) and directed to complete assessment in light of valuers' report - Whether apart from life tenant and remainderman there was no other beneficiary whose shares were indeterminate or unknown and, therefore, assessment should be under section 21(1) and not under section 21(4) - Held, yes - Whether, therefore, once present value of interests of life tenant and remainderman were brought to tax under provisions of Act, there was no other property or asset in hands of trustees which could be brought to tax under section 21(1) - Held, yes - Whether, therefore, Tribunal was justified in holding that trust should be assessed only to extent of value of interest of reversioners arrived at by valuers - Held, yes FACTS A trust deed dated 30-12-1945 was executed by the settlor vide which certain amounts, shares and securities were settled upon the trust for the benefit of 'A'. Under the terms of the said trust, 'A' was entitled to the entire income of the trust during her lifetime and on her death the assets of the trust were required to be divided amongst male children. In the individual wealth-tax assessment of 'A' herself, the life-tenant, the amounts of the capitalised value of her interest as a life-tenant were assessed and, therefore, while assessing the trustees of the trust in their representative capacity under section 21, the balance of the amounts, were sought to be assessed in the hands of the trustees. Accordingly, the WTO assessed the total wealth in the hands of the…

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