Law:

Section:

Section 21, read with section 5(1)(vii) of the Wealth-tax Act, 1957 - Trust/trustees - Assessment when assets are held by - Assessment years 1957-58 to 1966-67 and 1967-68 to 1969-70 - Whether actuarian valuation has to be taken into consideration when annuities are paid to a person having life interest in corpus - Held, yes - Whether where a beneficiary is entitled to be paid a particular sum out of income of fund on particular dates, his interest in fund on that particular date is to be assessed on basis of actuarial valuation of life interest of beneficiary - Held, yes - By an indenture Nizam of Hyderabad created a trust of certain properties i.e., jewellery mentioned in first Schedule of trust deed comprising parts I and II, shares and residence funds - Under clause 4 of trust deed settlor's daughter in law was permitted to use jewellerys mentioned in part I of first Shedule on ceremonial occasions and jewelleries mentioned in part II were to be used far ordinary purpose - Whether jewellery meant for ordinary and every day use, if an asset, was exempt from being charged to wealth-tax under section 5(1)(vii) - Held, yes - Whether since as per terms of trust deed so long a settlor's daughter in law was alive no other person could have any interest in said jewellery beneficial interest in jewellery fund had to be assessed only under section 21(1) - Held, yes - Whether since jewellery in part II of first Schedule which was kept for ordinary use was exempt from being charged to Wealth-tax, it was to be excluded in determining net wealth assessable in hands of assessee for each of valuation dates - Held, yes FACTS By an indenture, the Nizam of Hyderabad created a trust of three properties namely: (i) jewellery mentioned in the first schedule of the trust deed comprising Parts I and II, (ii) properties mentioned in the second schedule of the trust deed, being 5 percent tax-free cumulative preference shares in certain Company of the face value of Rs. 4,00,000, and (iii) a sum of Rs. 75,000 in cash for residence. are called the jewellery. Clause 4 was in respect of the jewellery fund. Under clause 4(b), the settlor's daughter-in-law, 'S', was permitted to use the…

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