Law:

Section:

Section 3, read with section 21, of the Wealth-tax Act, 1957 - Charge of tax - Assessment year 1980-81 - Assessee created trust for first son of one 'P' and transferred certain shares to a trust - Wealth-tax Officer included value of aforesaid shares in hands of trust while making assessment on ground that trust was found invalid as sole beneficiary was not in existence - Whether Tribunal was justified in holding that there was a valid trust in existence even if basic condition of section 6 of the Indian Trust Act was not satisfied - Held, yes - Whether, therefore, addition made on account of value of shares transferred to trust was to be deleted - Held, yes CASES REFERRED TO CIT v. Brig. Kapil Mohan [2001] 252 ITR 830/ 118 Taxman 430 (Delhi) [Para 4] and Wife of Rakesh Mohan (P.) Trust v. CWT [WT Reference No. 132 of 1982, dated 27-9-2004] [Para 4]. ORDER 1. The Income-tax Appellate Tribunal, Allahabad, has referred the following two questions of law under section 27(1) of the Wealth-tax Act, 1957, hereinafter referred to as 'the Act' for opinion to this Court : "1. Whether in law and on facts of the case the Tribunal was justified in confirming the CWT(A)'s decision deleting the addition of Rs. 6,87,077 made on account of value of shares transferred to the Trust ? 2. Whether in law and on facts of the case, the Tribunal was justified in holding that there was a valid trust in existence even if the basic conditions of section 6 of the Indian Trust Act were not satisfied/fulfilled?" 2. The reference relates to the assessment year 1980-81. 3. Briefly stated the facts giving to the present reference are as follows :-…

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