Law:

Section:

Section 4(1)(a)(iii) of the Wealth-tax Act, 1957 - Deemed wealth - Assessee settled certain shares on trust created for benefit of minor daughters and transferred them in favour of trustees - Whether value of such shares was includible in assessee's net wealth under section 4(1)(a)(iii) - Held, yes Section 21 of the Wealth-tax Act, 1957 - Representative assessees - Trustees - Whether on facts mentioned under head 'Deemed wealth' assessment had to be made in hands of trustees under section 21 - Held, no Facts The assessee had settled certain shares of a company upon trust and transferred them in favour of the trustees appointed thereunder. These trusts were created for the benefit of the assessee's minor daughters K, A and G. By two indentures of trusts dated 29-3-1961, the assessee transferred certain other shares of the same company in favour of the trustees for the benefit of his minor daughters, A and G. For the assessment years 1964-65 and 1965-66, the WTO included the market value of those shares in the assessee's net wealth, by invoking the provisions of section 4(1)(a)( iii). On reference, the assessee submitted that there being duly executed instruments of trusts, the assets sought to be taxed could be assessed only in the hands of the trustees by virtue of section 21 and the provisions of section 4(1)(a)(iii) did not, therefore, apply. Held The provisions of section 21 are to be applied when an assessment has to be made in the hands of the trustees. Section 4, on the other hand, requires the inclusion of the assets of a trust as therein mentioned in the computation of the net wealth of the settlor. Such inclusion is required to be made of the value of assets which have been transferred by that individual to a person or an AOP otherwise than for adequate consideration for the benefit of, inter alia, a minor child. In the instant case the stage for assessing the trustees in respect of such assets was not reached and the provisions of section 21 were not applicable. The same conclusion may also be reached by applying the principle that the specific excludes the general provision. Thus, when trustees have to be assessed to wealth-tax, the provisions of…

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