Law:

Section:

Section 21, read with section 5, of the Wealth-tax Act, 1957 - Trust - Assessment when assets are held by - Assessment years 1982-83 to 1987-88 - Whether assessment on representative assessee shall be made and tax shall be levied upon and recoverable in like manner and to same extent, as it would be leviable upon and recoverable from an individual and expression 'leviable' in section 21(4) would rope in all provisions of Act applicable to an individual relating to levy of wealth-tax - Held, yes - Whether if an individual is entitled to exemption under section 5, then correspondingly exemption would be available to representative assessee in determining net wealth - Held, yes - Whether section 21(4) cannot be construed to mean that it will attract only such sections, which provide for levy of tax and exclude sections which grant exemption - Held, yes FACTS The assessee was a discretionary trust and the individual shares of the beneficiaries of the trust were indeterminate and unknown. The assessee- trust claimed that it was entitled to the benefit of section 5 when the assessment was made invoking section 21(4). The WTO held since the assessee-trust was assessed in the status of association of persons, it was not entitled to the exemption available to an individual under section 5(1). His view was confirmed by the Commissioner (Appeals). The Tribunal, however, held that the provisions of section 21(4) would apply and the assessee would be entitled to all the exemptions available to an individual. On reference : HELD Section 21(4) deals with a case of an assessment in the case of a discretionary trust and it provides that the tax shall be 'levied upon' and recovered from the representative assessee in the like manner and to the same extent as it would be leviable upon and recoverable from an individual, who is a citizen of India. The section, therefore, provides that the assessment on the representative assessee shall be made and the tax shall be levied upon and recoverable in the like manner and to the same extent, as it would be leviable upon and recoverable from an individual and the expression 'leviable' in section 21(4) would rope in all the provisions of…

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