Law:

Section:

Section 27(3), read with section 4(1)(b), of the Wealth-tax act, 1957-Reference-Question of law-Sums gifted to assessee and his son were invested and income therefrom assessed in hands of an aop, consisting of assessee and his son-Shares of members in aop were indeterminate-Whether tribunal's finding that assessee was not liable to wealth-tax on value of his indeterminate interest in said aop could give rise to any referable question of law-Held, on facts, yes Facts The assessee's father had made a gift during his lifetime to the assessee and to his grandson 'V. These amounts were invested and the income therefrom was held by the AAC in the appeals for the assessment years 1954-55 to 1956-57 as belonging to an AOP, where the shares of the members were indeterminate. In the wealth-tax assessment of the assessee, the WTO included half share of the assessee in the said AOP, consisting of the assessee and his son 'V, in the assessee's wealth. On appeal, the AAC upheld the WTO's order. On further appeal, the Tribunal, while placing reliance upon section 4(1)(b ) and rule 2 and also upon a number of circulars of the Board, held that the assessee was not liable to be charged with wealth-tax, in respect of the shares in the said AOP. The Tribunal also rejected the revenue's reference application under section 256(1) on the ground that in view of the clear and explicit condition which could be spelt out from section 4(1)(b), read with rule 2 and the circular in question, the legal position was so dear and self-evident that there was no need to make a reference. On an application under section 256(2): Held The facts, in the instant case, were not at all in dispute. The revenue's contention was that it was entitled to include the value of the share of each member of the AOP on the basis that where there was no specification of the extent of the share in the AOP, the presumption was that each donee had equal share in the monies which were gifted. The question whether such an assumption was, in law, available to the department, need not be decided but one cannot doubt that the controversy was not a factual one in its nature. It was a pure question of law. Accordingly, the…

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